Monday, September 30, 2013

September 30, 2013

Ignoring for the moment the need for the RBI to get intimately involved in transactions between retailers and consumers, this is precisely what is wrong with our country:
Babu Jayaram and his family have been waiting to replace their nine-year-old television with an LCD TV. They have also set their sights on acquiring an SLR camera.
Their dream to own these high-value products by swiping their credit cards is, however, unlikely to be realised this Diwali with the Reserve Bank of India (RBI) coming down on banks offering zero per cent-interest consumer finance schemes.
“We were banking on such schemes. Though a processing fee was levied, it used to be adjusted against the second instalment. I ended up paying only the cost of the product. But with the ban on zero-interest schemes, it will be some time before we get access to such easy consumer finance,” he said.
The need for instant gratification, buy-now-pay-later, pledging future earnings to pay off usurious loan sharks masquerading as your friendly corporate banker/credit card company. It's not obvious how much of our economy is underpinned by easy credit. No wonder everybody's keeping their eyes peeled for the RBI's latest pronouncements about the repo and other policy rates -- if businesses (and consumers) relied only on money in the bank to buy stuff, our GDP would probably be lesser by 20%.

"Also, by 2100, all our brains will be in vats, with our needs being fulfilled by electric impulses fed to our neurons, while machines will harvest our brains' excess energy to power themselves in their continued domination of humankind". Oh wait, that was the plot for The Matrix.