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here was a time when those who parked their savings
as fixed deposits in banks were looked down upon for their inept money
management skills. They would deposit their money for a certain term and had a
good night sleep. Their unwavering faith in FDs could not be dampened despite
the interest rate hovering between 12 and a mere six per cent in the past
years.
More than
the return, a sense of satisfaction that their money was at a safer hand,
mattered to them. Ironically they had
become a butt of ridicule at the hands of those riding high on bulls.
But the kind of return from the bourses
did not fail completely in mesmerizing even the traditionalists. The staggering
earnings at the stock market brought in a shift in the conservative patterns of
savings.
One’s success story, though ephemeral in
nature, became an inspiration for another and thus the chain grew. Even the novice started investing without
knowing the prospects of the company they were investing in.
Experts on television channels egged the
hitherto undecided investors with prudent(?) tips. They might have patted
themselves on their back for their contribution to generating wealth for the
common man. Everything was going on well
until the onset of the nemesis.
Once the recession fever caught up the
world, India could not escape its ramifications as every aspect of business is
inter-related in the globalised scenario.
The country is now caught in the ensuing chain reaction, despite fortified
against the economic downslide to some extent. Retrenchments, downsizing, right
sizing, pay cuts, shutdowns etc. have now become the norm.
The stock market got the major blow as the
sensex nosedived from the all time high of 21,000 points to 10,000 in just nine
months. The financial pundits who were crowing about their expertise during the
boom time are now clueless about the depth up to which the market could plunge.
While the short-term investors run for
cover, it does not seem better even for the long-term investors. What is the
return one would get if the market continued to languish at these levels for
4-5 years? The dividend is again subjective as it is based on the company’s
performance. So leave alone the return,
even the capital itself is at stake.
Despite the strong regulations, vigilant
media and savvy(?) stock analysts, the software giant Satyam could pull the
wool over the eyes of the investors/authorities for a few years. The future of
the employees and investors is at stake. Satyam may not be an isolated case.
There could be many more Satyams lurking behind the façade of a healthy growth.
Not a long ago, the Global Trust Bank
betrayed its investors and depositors alike. However, the timely action of the
Reserve Bank of India enabled the merger of the bank with Oriental Bank of
Commerce; the hard earned savings of the depositors were protected but not of
the investors. So is the case with United Western Bank and Sangli Bank which
were saved at the behest of the RBI.
Such uncertainties writ large over the
stock market, the good old bank depositors, at least for the time being, are
having the last laugh.
i.06.2009
