With Wall Street biggies in trouble and private Indian banks struggling to allay fears of depositors, has the trust factor in banks come down? afaqs! spoke to a few industry veterans.
partner, chlorophyll brand & communications
No, I don't think so.
A viper may be taken as a representative of a species of snake and if one viper has bitten a man causing death, it is safe to generalise that ALL vipers are likely to have the same effect.
On the other hand, if one Guyanese (or whoever) commits a murder, he is only an instance, and we cannot generalise that ALL Guyanese are murderers.
Now, some generalisations do become common in a society (e.g. "most politicians are crooks"). Unfortunately, in India we tend to assume that all instances can be the basis of reckless generalisation. Which is why if there is an instance of a single cop accused of molesting a woman, the headlines read, 'Police force must hang its head in shame', as if every policeman is guilty.
But as you can see, all instances are not representative, and thus, to return to where we began, no, I don't think the recent happenings in the financial sector have eroded consumers' trust in banks as a group.
executive director and CEO, Mumbai, DraftFCB + Ulka
No, positively not.
And when we thought things will turn for the better…26/11 happened. The last blow was Satyam, and this happened just a few weeks ago.
In the light of all this, let us see what has happened to Indian banks and the money that some of us may have kept in deposits with these banks. The bank deposits have delivered better returns than stocks, shares and even real estate. And Indian banks are all still going strong. Yes, they may not all be as profitable as they were a couple of years ago, but they are not at North Block/South Block with begging bowls.
Like a child who, when he is chased by a pack of rabid dogs down the street, rushes home into the arms of her mom, the recent happenings in the stock market and corporate board rooms have made the Indian middle-class investor rush back to 'mommy' - the Indian banks. And Mommy is offering slightly better interests as well.
head, marketing and communication, ASK Group
The implication for consumers in India is two-fold. That set of consumers to whom large international brands represented safety and savvy has seen its confidence being shaken completely. On the other hand, the set of consumers that had reposed its trust in the PSU banks and financial institutions has had its confidence vindicated or reinforced.
Resultantly, there is a herding of customer confidence towards these home-grown and government-backed institutions. But at the same time, it is important that all the existing players make a strong attempt to engage with the clients and educate them on the pitfalls of taking panic decisions. A concerted effort would mean more educated clients which, in turn, would mean more responsible financial services providers and a flourishing financial sector.