Chartered Accountant Dr Tejinder Singh Rawal on Sunday said that the current banking crisis in the US may lead to a recesseionary trend and its may also affect Indian economy in coming days. “However, its impact on our economy could be minimized if everyone makes cumulative effort,” he said while speaking at the ‘Augment Session’ organised by the Vidarbha Management Association (VMA) at Chitanvis Centre, Civil Lines in the city. He drew legitimate attention to the bankruptcy of banks in America and its effects on the Indian economy. “Despite the absence of management errors and corruption, the leading banks in America have collapsed. This has happened in just one month. Even though the assets of the banks were safe but lack of funds at the time of withdrawal by customers created misunderstanding. The chaotic situation was result of the disconnect,” he observed.

Rawal further said, “when banks are safe, customers don’t withdraw or are in need of money, but bank run starts, when we hear any news, which leaves cascading effect and amounts to such debacle. 18th largest US bank with strong systems and ethics, could not withstand pressure from customers, which effectively had to declare bankruptcy.

Foreign investors started withdrawing money from the banks. It also includes investors in India. Obviously, the collapse had a big impact on the Indian economy as well. The Indian stock market also rumbled. Silicon Valley is primarily a bank for startups.

Mental state is important in a recession. If everyone withdraws money from the banks thinking that there will be a recession, the economy will suffer. But, at the same time, if everyone believes that there is no such situation, the situation will be different all together. Regulations related to banks in India are strict. Augment Tip was shared by Prerna Kotecha on “Color Therapy for Stress Management”. Moderator and session in-charge was CA Ritesh Mehta.