Why support a disaster on us because you are safe?

Loans from banks account for 60% of credit to the corporate sector but, "In 2018, domestic credit to the private sector by banks as a proportion of GDP was just 50% in India. In comparison the proportion was 158% in China, 141% in South Korea, 112% in Thailand, 81% in Chile, 66% in South Africa and 61% in Brazil," wrote Prof Arvind Panagariya and Rajeev Mantri. In 2019, 195 companies owed Rs 13 trillion to various lenders. Market capitalisation of well known companies, such as Vodafone, Tata Motors, Tata Power and Adani Power were below the levels of their debt. Member of Parliament Subramanian Swamy has alleged that the Adani group owes Rs 4.5 trillion to banks to which the group replied that it has never had any non-performing asset. "Today, corporate houses, some of which have substantial investible capital, constitute the largest untapped domestic source of new investment in banking," they write. If companies are sitting on excess money they can invest in new capacity or form venture capital funds to lend to business directly in exchange of shareholding. Non-banking finance companies (NBFCs) are barred from accepting demand deposits from the public. It seems ominous that companies have limited liability while people are insured for only Rs 500,000 on their deposits to banks, which is less than nothing. The European Union covers deposits up to 100,000 euros, which amounts to Rs 8.7 million at today's exchange rate, while the US, where Prof Panagariya lives, covers deposits of up to $250,000, which amounts to about Rs 18 million at today's exchange rate. "Simply put, it is prudent to keep the class of big borrowers (big companies) apart from the class of lenders (banks). Past examples of such mingling -- such as Japan's Keiretsu and Korea's Chaebol -- came unstuck during the 1998 crisis with disastrous consequences for the broader economy," wrote Udit Misra. Do large companies in the US or Europe own high street banks? If not, why is the professor wishing this danger on us? If one professor supports malicious intentions of the government, two others, Profs Raghuram Rajan and Viral Acharya, describe it as a "bombshell". "Interestingly, the IWG (Internal Working Group set up by the Reserve Bank) reports in its appendix that all the experts it consulted except one 'were of the opinion that large corporate/industrial houses should no be allowed to promote a bank'. Yet it recommends change." India's largest company Reliance was fined Rs 700 million for insider trading of Reliance Petroleum shares in 2007. Kishor Biyani of the Future Group has appealed against a fine for insider trading in 2015. Billionaire investor Rakesh Jhunjhunwala has filed a consent appeal for an insider trading charge in 2016. Michael Milken was sentenced to 10 years in prison, reduced to two years, for insider trading in the US. In India, just a few rupees in fine. "Even if one accepts that regulation will not be wholly successful in controlling excesses, this cost must be weighed against benefits, which are by no means trivial," wrote Panagariya. We Indians, especially pensioners, will be reduced to penury after saving for a lifetime of hard work. While he sits protected in the US. Shameful.