top of page
Nov 20, 20235 min read

Fixed Deposits: Insecurely Secure? A Letter to the Finance Minister and RBI Governor

Posted on 20/11/2023 (GMT 11:15 hrs)

Updated on 23/12/2023 (GMT 18:45 hrs)

To

Mrs. Nirmala Sitharaman,

The Honourable Minister of Finance and Corporate Affairs,

Government of India

Sub: Appealing for a Statutory Warning for Fixed Deposits, Recurring Deposits and Non-Convertible Debentures

Dear Mrs. Sitharaman,

We, the common people, are not aware of the fact that Fixed Deposits and Non-Convertible Debentures are “unsecured” investments. Therefore, we pondered upon the following points of concern to break the common superstitious notion of FDs and NCDs being “safe investments”:

· In post-independent India, have you ever heard of Fixed and Recurring Deposits (FDs and RDs) as being liable to market risks?

· Has anyone ever heard about anyone losing their money in fixed deposits?

Yes, recently more than 77k have lost 77% of their FD amount in the Dewan Housing Finance Corporation Limited (DHFL) case. The NCD holders have lost 60% of their money. These events of losing money signal the coming of the “acche din” and “amrit kaal”.

· In the case of share markets, mutual funds, SIP etc., there is an illegible statutory warning in every single advertisement or “terms and conditions” paperwork, which reads: “SUBJECT TO MARKET RISKS. INVEST RESPONSIBLY AFTER READING ALL THE RELEVANT DOCUMENTS CAREFULLY.”

· However, in the case of FD and RD, there is no such warning as of yet. Rather, it is projected as something “fast-secure-safe”. Yet, FD (as well as NCD) is said to belong to the “unsecured” category!

· Why does the government, as a welfare state, not mention this message of underlying insecurity in the case of FD, RD and NCD?

· We are appealing to the Government that they should inform the general public regarding the (in-)security of Fixed Deposit investments and non-convertible debentures.

There is no doubt that the welfare state (otherwise a “sick society”⤡ (Cf. the Orwellian new doublespeak) with “staggering incompetence”(a la Parakala Prabhakar⤡) is insisting on investing in risky areas of the share market, mutual funds (surrogate share market). Thus, the government deliberately throws their citizens in the risky zones of chaosophy. There are no zones for “security” if I am not a superrich wilful defaulter (Cf. Is there any one-to-one correspondence between Bharatiya Janata Party’s increasing assets and abrupt bankruptcies in India? VIEW HERE⤡)! The welfare state also does not hesitate to take GST for health insurance policies! (Cf. SCRAP the high GST for health insurance premium of people above 60 VIEW HERE ⤡)

This existential crisis haunted us when we have seen that two bullets are allotted per citizen, whilst the number of hospital beds available is a meagre 5 for a 10k population!

5 hospital beds/10k population: India ranks 155th in 167 VIEW HERE ⤡ (As reported on 17th December, 2020 ©The Times of India)

However, like Charles Chaplin in “The Circus” (1928)⤡, we are “proxy” rope-walking (in the absence of the “regular” rope-walker!) while being troubled by the monkeys of the “naturalized” (fallacy of misplaced concreteness) market-space. Although initially there was a metal wire that was tightly attached to us in case we fatally succumb to a “fall”; soon, the monkeys disconnected this manipulable hedge of protection from our bodies– now we are just suspended rope-walkers. The masters of the universe are witnessing our “show” by declaring: “He is insured”!

Hoping you will entertain my plea at the earliest.

Thanking you in anticipation,

Yours Sincerely,

Dr. Debaprasad Bandyopadhyay

Mrs. Rupa Bandyopadhyay

Mr. Akhar Bandyopadhyay

A Victimized Family of Bewildered, Beleaguered, Perplexed, Anguished, Anxious, Hapless, Helpless and Ailing DHFL FD Holders

ON BEHALF OF ALL ANGUISHED, AILING DHFL FD, NCD AND SHAREHOLDERS [USUAL DISCLAIMERS APPLY]

COPY TO:

1. Mr. Shaktikanta Das, The Honourable Governor, Reserve Bank of India

बहुजनहिताय बहुजनसुखाय च॥

(“For the happiness of the many, for the welfare of the many”)

ADDENDUM

While under the ill-conceived IBC act (2016, amended 35 times ) that was wrongly applied⤡ to the DHFL as a “test case” (as if the FD holders are guinea pigs⤡), FD holders belong to the “unsecured” creditors category, it is also said that under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, FDs have a secure framework of operating.

Is that so?

Why this contradiction? Where will the common citizens go?

It is said that the Banks fall under “secured creditors” category, and moreover, the FDs done with the Banks fall under the insurance coverage scheme. On the other hand, non-banking sector does not fall within the said security framework as per the RBI. Why did then august institutes like the Indian Air Force, UPPCL invest in this space of insecurity?

“…the fixed deposit holders or the investors of non-convertible debentures (NCDs) are not secured creditors. The commercial banks are.

When a bank extended a loan to DHFL, the latter’s assets, financial or physical, were kept as collateral with the banks. As a result, the bank loans to DHFL are secured. This is in contrast with public deposits as the public or any such institution gives the money to a bank or an NBFC without asking for collateral.

According to the Insolvency and Bankruptcy Code (IBC), secured creditors are the highest priority to recover their dues. In the liquidation hierarchy, depositors stand low since they are unsecured creditors. So proportionately, banks will recover more than any depositor.”

RBI’S RULE (?):

Why this discrimination between Bank-FDs and NBFC-FDs?

########################################

UPDATE (23/12/2023):

We forwarded the above letter with a covering letter to Mr. Piyush Goyal, the Minister of Consumer Affairs, Government of India, along with the Deputy Secretary of the National Consumer Helpline.

Given below is the text of the covering letter:

To

Mr. Piyush Goyal,

The Honourable Minister of Consumer Affairs,

Government of India 

Dear Mr. Goyal, 

We are forwarding you this letter dated 20.11.2023⤡, initially addressed to the Honourable Minister of Finance and Corporate Affairs (and copied to the Honourable Governor, the Reserve Bank of India), having the subject “Appealing for a Statutory Warning for Fixed Deposits, Recurring Deposits and Non-Convertible Debentures”. As there is no statutory warning to be found in the advertisements for Fixed Deposit investment, we are requesting you, after the Dewan Housing Finance Corporation Limited (DHFL) Scam⤡ ⤡, to put a statutory warning (in the likeness of share market, SIP and Mutual Fund advertisements) in the case of fixed deposits being an “unsecured” investment. 

Thanking you in anticipation,

Yours Sincerely,

Dr. Debaprasad Bandyopadhyay

Mrs. Rupa Bandyopadhyay

Mr. Akhar Bandyopadhyay

A Victimized Family of Bewildered, Beleaguered, Perplexed, Anguished, Anxious, Hapless, Helpless and Ailing DHFL FD Holders

ON BEHALF OF ALL ANGUISHED, AILING DHFL FD, NCD AND SHAREHOLDERS [USUAL DISCLAIMERS APPLY]

COPY TO:-

1. The Honourable Deputy Secretary, NATIONAL CONSUMER HELPLINE (NCH)

P.S. We are writing to you in special reference to your long-maintained affinity with the so-called new “owner” of the DHFL, viz., Mr. Ajay Gopikisan Piramal. It was not so long ago when his compassion for your kind self showed in the case of the Flashnet Scam (may be true or false, i.e., we are maintaining contingency with regard to the truth-value of the state of affairs):

बहुजनहिताय बहुजनसुखाय च॥

(“For the happiness of the many, for the welfare of the many”)

Comments

bottom of page