Banks and their catastrophic collapse and how the saviour turns

Abstract

The commercial banks are lifeline and nervous system of any country. In India their proactive role in economic development cannot be ignored. The country requires a healthy banking system to support the ever increasing economic activities to keep pace with development paradigm. That banks conventionally are sandwiched between societal commitments and commercial motives is an age old established fact. The twist in the story is due to apprehensiveness about their financial strength to withstand the rising menace of their advances and qualm about their adequateness of capital funding. In either way, the role of the Government is conspicuously political. The present paper brings an econometric inquiry into the nature and causes of a catastrophic collapse that the banks are on the verge of.