Beg, borrow and....

"India Inc has begun to feel the adverse impact of RBI's interest rate hikes of 190 basis points in the current financial year, industry body CII said..., as it urged the central bank to moderate the pace of its monetary tightening ahead of the forthcoming policy." NDTV. "With a yawning gap existing between credit and deposit growth, an additional rate hike will incentivise savers, thus providing impetus to deposit growth and help narrow the credit-deposit wedge, the Confederation of Indian Industry (CII) said." To really incentivise savers the RBI should stop financial repression of negative real interest rates, BI, and increase interest rate above the rate of inflation to lure savers into putting their hard earned savings into bank fixed deposits again. CII wants RBI to incentivise savers by increasing rates but to keep lending rates low to help businesses. Seems to be speaking with a forked tongue. idioms. Companies have the option of tapping the share markets. "Sensex closed at 62,681.84 points on Tuesday a record high." TOI. "Over the last 20 months, almost $22 billion of FPI (foreign portfolio investors) investment has flown out of equities, Over the same period, the BSE Sensex has risen 25%." Because assets under management of equity mutual funds saw an increase of 50% to Rs 15 trillion between April 2021 and October 2022. So why not raise money from markets? Because, "The Reserve Bank of India (RBI) has disclosed that Rs 10 lakh crore (Rs 10 trillion) in bad loans have been written off in the last five years. Worse, banks have only been able recover about 13% of the bad loans from defaulting corporates and other entities." The Wire. "Some time ago, a prominent Kolkata-based industrialist said exploiting the bankruptcy law was the new game in town and corporates were getting away with 90% haircut on average on defaults." Money for free. "India's banking sector is in a purple patch." ET. "The banking sector's weak loans (non-performing loans and performing restructured loans) is likely to decline to 4.5-5% of gross loans by March 31, 2024," which will be "significantly down from the peak of 12.5% level seen in fiscal 2008 and the 8% mark seen in FY 2021." We know why. "Indian lenders are expanding lending to local corporations at the fastest pace in more than eight years, a sign of a new private investment cycle starting in the world's fifth-largest economy even as growth in large developed economies and China slows." ET. But, they want more. Meanwhile, "The jobless rate in major developed economies, at 4.4% in September, is the lowest since the early 1980s, according to the Organisation for Economic Cooperation and Development (OECD)." Mint. "Two of the Fed's regional presidents, John Williams and James Bullard, warned...that the threat of inflation hasn't faded. The US central bank may have to lift rates higher and keep them there throughout next year to curb soaring prices, they said." BI. If the RBI does not follow suit the dollar will become stronger against the rupee and that will increase inflation. You must pay interest on loans even if you suffer losses. But dividends on shares only if there is profit. So why borrow?