A recent news item saying that people with more than 100 lakhs in bank accounts are withdrawing their deposits because they are not as confident in the institutions is interesting. Those who support the government are looking around for financial reasons and the rest are cheering that another pillar that props the power to be has fallen. However there may be more to it than a simple matter of institutional confidence at stake here.

People had lost confidence in the banking system many years before and money withdrawal is only one symptom of that. They keep their money in banks out of fear from physical threats and now in the hierarchy of fears the banks are going up the ladder. They are increasingly being perceived as looters rather than protectors.

This complete switch has been happening over decades to be honest but the recent mishandled and poorly conceptualized policy of merging weak and strong banks has resulted in this quick drop of confidence. It's neither new nor alarming; it's been happening here for long and shows the erosion of the State or formal sector in Bangladesh.

Who are the crore patis?

Once crore patis meant the rich but now those in the crores bracket are both in the middle and upper middle class. Basically, the term is very seductive and is akin to a millionaire. It sounds better than it actually is. But the number of such people is many. A simple flat in a non-fancy Dhaka area can cost a crore and nothing is found below 50 lakhs. A person's retirement benefit if put in a lump becomes that as well and assets built over a lifetime all together make it far past a crore figure. It basically means that the value of money is less, not that they are rich.

A young person joining a private company will get a salary of 60-70 k per month which with benefits becomes 1 lakh per month. He has at least 40 years working life and he also gets promoted which means more money. Basically every 5 years he earns a crore at least. Within an economic lifetime he will make anywhere between 25-50 crores. Even if he spends 10% of that he is a crorepati so such titles are now a dime a dozen.

And if one includes GOB staff, then one gets the number of koti patis very easily. It's not the 1000 kotipotis but normal 10 crore wallahs which even a lowest GOB staffer has. And this is apart from ancestral property etc. So when we say kotipatis we sometimes don't remember that in today's economy the term has little meaning and the single crore has to be adjusted to various rates including inflation > The new currency should be "Dos kotipoti" (10 crores) It's more accurate and makes more connect to reality. Simply going by earlier terms would mean nothing.

Banks and the confidence factor

The problem with the media is that they recycle old news and try to pass it off as new revelation. That people have no confidence in the banks is probably the oldest news in town. Yet when the media blares the news it's considered a scoop. That's not why they deposit money in the banks. It's for safety and earns some interest. But that's for the lower end of the depositors, the juniors if you will. That's not what worries the Governments. They are talking about the multi crore deposits that live by different rules.

There are two kinds of banks -public and private. Public banks loan money which are not mandatory for returning which is why we have the loan defaulter strategy as part of keeping economic growth in society. It strengthens the constitutional right of all to become wealthy and promises by the government to help that pursuit. Hence not returning money taken as a loan is a legitimate form of business.

The other is the private banking sector, many of whose promoters are loan defaulters themselves. Its they who give loans to themselves and forget to return the money making the bank so called weak and ready for merger. They forget that these people are also doing as per one of the four pillars of the constitution including "Bengali nationalism" which is a celebration of our national identity and character. So where does any confidence factor come in for Bangladesh's kotipatis?

What may be happening is that a new form of scam may be in town and the big potis are withdrawing to fund that. So there is no need to panic and banks are not really deposit machines but a place for kotis and their patis to relax and chill.

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