THE SITUATIONS OF MASS HOUSEHOLD SAVINGS GOING INTO SPECULATIVE ACTIVITIES TAKING MACRO PROPORTIONS HAVE POTENTIAL FOR LOT OF PEOPLE TO SUFFER AND BRING IN TEARS UNLESS CHECKED

THE SITUATIONS OF MASS HOUSEHOLD SAVINGS GOING INTO SPECULATIVE ACTIVITIES TAKING MACRO PROPORTIONS HAVE POTENTIAL FOR LOT OF PEOPLE TO SUFFER AND BRING IN TEARS UNLESS CHECKED


Dear Readers,

I have read the following news articles that say that the Household Savings in India are finding inroads into Speculative Activities in Mass Scale and assuming Macro Proportions and Causing worry at Macro Level in India.

It is being said none other than the two National Regulators which can be presumed to be backed by credible data at their disposal as regulators:
1.     Capital Markets Regulator - Chairperson of SEBI .... The News Article Quoting SEBI Chairperson saying: Lot of Younger People putting money in Future and Options (F&O) segment and have lost their precious savings, is a cause of Macro Worry.

2.     Banking Regulator ... RBI Governor ..... The News Article Quoting RBI Governor saying: The House Hold savings are moving from Banks to Mutual Funds, affecting liquidity.

The Mass Movement of Household Savings to Speculative Segments of Economic Activities in Indian Economy where the "Theory of Ocean" that involves Bigger Fish eating on the Smaller Fish operates invariably, has the Potential for a large number of Small operators lose money to a few or small number of Big Operators and a large number of people to Suffer and it can bring tears in to their eyes by losing their precious household savings in the "ocean" market risks.

The Worries at Macro Level as being said by the Regulators in Public Domain are justified and some kinds of barriers are necessary for checking the mass movement of Household Savings to Speculative Segments, in order to prevent tears from the eyes of lot of common people before it happens further and goes out of control, and once they lose their money in the speculative activities it can not be restored.

Also, another issue, that is quite co-relevant, I have said earlier, by suffering from an Undue-Inflation Fobia, now additionally ( RBI saying indirectly and not directly) as the Household Savings from Banks are moving to Mutual Funds, RBI is illogically holding into the Highest Interest Regime ( Repo Rate of 6.5% ) for more than 16-months, in spite of Dissent of 2-Members out of 6-Membered MPC of RBI in favour of Repo Rate Cut, and by using the Highest Repo Rate as a tool the Banks are revising the EMI of small borrowings such as Home Loans, Educational Loans, Motor Cycle Loans that are availed by Common People of India by a very Large Mass, by more than 20%, is also bringing tears to the eyes of the Common People of India, that needs to be looked at appropriately at appropriate level.

I am leaving a piece of Good Advice as a Well Wisher to you all, please be careful about putting your precious Household Savings in Speculative Activities while the Regulators themselves have been saying it has assumed Macro Proportions bringing them to Macro Worry, and that has potential to bring in tears to the common retail operators/participants. Think twice before you put your scanty resources in speculative activities, if you are a small retail operator and Not a Large Player having risk bearing capacity with a larger capital base to withstand the vagaries of Speculative Markets ( like the Ocean Theory I said above ). I am leaving this advice for you, while assuring you that I am making impartial statements in this note, while I have nothing to do in those speculative activities and I have left it long years back. I have not yet heard from anyone over the decades from any Retail Operator/Participants who have not lost money in such Speculative Activities ( Let me make clear, I am not referring to anyone who has a Large Capital Base to withstand its vagaries as a Large Operator ).

The Links to the above cited 2-News Reports are given below, if you like read it, but I would recommend that all of you should read it:

1.      Rising F&O trade becomes macro issue now, household savings going into speculation: Sebi chief
( Related to this you can also read the following Mint Article to get some more Data:
SEBI chief Madhabi Puri Buch says F&O volume surge a ‘macro issue’ now, not ‘micro issue of investor safety’

2.     Household savings are moving from banks to mutual funds impacting liquidity: RBI Governor Das

As I said, I am leaving a piece of Good Advice for the Retail Participants in this situation, the younger ones have to be more careful, as the younger ones are more prone to succumb its temptation. You will find from the News Report where SEBI Chairperson as the Regulator says a lot of young people have already lost money, and this statement from the Regulator as I said could be credible with data at their hands with rightful access to it. Also, it is very funny but very normal, whoever loses money in this kind of speculative activity, never admits about it, they suffer silently keeping quiet. The Regulator should have the analyzed data, hence they are making public statement about it, it has to be considered credible without any doubt.

With Best regards,
Dr. Nimain Charan Biswal,
Mumbai, India


About the Author: Dr. Nimain Charan Biswal is a B.Sc.(Agri. Science and Technology), M.B.A. and Ph.D.(Management Area ) by qualifications; and he has 38+ years of work experience in both industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University (with Resource Support of IIM-Ahmedabad). He is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organizations in Senior/Top Management Capacities at Board level as well as Managing Director and CEO. He is a management expert covering extensive areas from management in industrial sectors, management in agriculture and dairy, development management to management of public systems. He is a prominent professional of India and known Internationally as well. He lives at Mumbai in India.





Comments

  1. MKPAugust 17, 2024 at 1:07 PM

    Dear Dr. Biswal,

    Are you not ashamed that because of your obstinate, inconsiderate actions so many of our fellow IRMAns and their families will loose their health insurance, for quite a few this is the only health insurance they have. This policy has helped hundreds of alumni and their older parents in particular.

    Please do not do this, else you will have the blood and grief of so many people on your hands.

    ReplyDelete

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