The ghettoization of communities and the sectarianization of credit amidst the lockdown in India

An unfortunate consequence of the coronavirus lockdown with the shutting down of major sectors in manufacturing, trade and tourism has been a heightened ghettoization of communities who become increasingly withdrawn from wider developments as they are often working from home, even their mobility in public spaces which may permit interactions with others, such as schools, gatherings, amateur sports, cinema, dining out, and activities at health centers, salons, etc. having been severely crippled, has led to a mass withdrawal, an exodus if you will of the public from the public sphere. 

The extent to which this was necessary is a decision which has been made between epidemiologists, doctors, and governments. However, even governments are now coming under pressure to relax these norms. Here, in India we are witnessing the scaled opening of public establishments with theaters and restaurants presently permitted to operate at 50% capacity. In more vital sectors, government offices are operating at 30% capacity, while major factories are capped at 50% of the workforce.

During the same period of the withdrawal of the public from the public sphere however, of a people being locked either in their homes, in neighborhoods, and yes, quarantine factories and hospitals - the extent of their association with the private sphere have been greatly diminished. Within such configurations, their prime point of contact with the outside world has remained news and media channels.  Educational institutions too en masse have shifted to an online mode of teaching taking into account the restrictions. Even doctors have been offering consultancies over zoom calls, instead of meeting patients in person. This is unmistakably the most generalized and global ghettoization we have experienced in recent history.

These isolations of relationships amidst the cover outbreak have not only hurt our public health and healthcare systems, not to mention our economy, but have led to the congealing of feudal and net-feudal sentiments and associations. Perhaps the most dangerous of these tendencies being an expansion of religious segregation in the realm of credit. 

The Federal, on 30th June, 2021 carried a story titled ‘Hindutva groups take ‘Hindu Bank’ to Kerala’ ; many call it a polarization tactic. In the story Shahina K K states that ‘Nidhi Banks’ or companies, which in India are registered under section 406 of the Companies Act, 2013 - are being called for in the state of Kerala. These institutions are principally involved in borrowing and lending money, and are regulated by the Ministry of Corporate Affairs. They are effectively banking organizations, however they can be registered and function without the approval of the RBI. As I understand it, this may be a unique exception made for a banking service in India as all other major players - SBI, HDFC, ICICI require to be registered and regulated, i.e. hold certain reserve capacities, by the RBI.

This is not the end of the worries, as there is a strong tendency that the credit that is circulating in and through these institutions may be controlled and distributed along lines of religious denomination. This is the threat which Shamina identifies when she points out that Hindu groups are calling for the entry of such institutions into Kerala, with vocal demands being made for their establishment via influencer groups on WhatsApp, Facebook, and Youtube. 

Furthermore, their establishment is seen as a ‘fitting reply’ to the ‘concept of Islamic banking’. One such group which is aggressively championing their cause is the ‘Hindu Samrakshana Parivar’ on Facebook. They  highlight packages advertising loans and deposits, however they are awash with criticisms for the communists in Kerala alleging that they promote ‘Islamic Banking. (Ibid)’ 

The ruling party, CPI(M) has taken cognizance of this and has issued a circular stating that are committee members should be ‘cautious of this trap’ and ‘not cooperate with such a venture’. Former finance minister of Kerala, Dr. Thomas Isaac cautioned that the concept of ‘Hindu money for Hindus is dangerous’ and views it as a ploy to create communal polarization when all other tactics have failed. 

My prime objections to such an establishment are threefold:- 

1. How precisely does a banking institution (or company) segregate money or credit? Once an account is deposited and in circulation in the form of loans to other members, it functions effectively as credit for that institution irrespective of who made the deposit. 

2. This leads to the far more dangerous situation where a financial institution is making decisions regarding deposits and credit on grounds of religious denomination; an unhealthy financial practice in itself, to say nothing of its divisive effects on society and an economy. 

3. Amidst such developments, what has prevented the government from stepping in and marking out the powers and functions of such Nidhi Banks? And why are they exempt from the regulations that all other banking companies comply with - chiefly, registration with and regulation by the RBI?

This tendency of the sectarianization of credit, sadly complements the ghettoization of communities as we come out from the lockdown, and as practices, can do no good for our society or our economy. 

Also to be noted here, is the continuance of the tendency of Hindu Right Wing groups disseminating false information. As the director of the Kerala State Financial Enterprises - V K Prasad notes, the analogy with Islamic banking holds no water. The concept of Islamic banking according to Sharia law is to run a bank interest free and does not entail that only Muslims can avail of its services (Ibid).

There is also noted resistance from among the Hindu community with P V Jain, the president of The Hindu Economic Forum stating that ‘Any financial institution run by Hindus, for Hindus is unconstitutional’ and that religion should not be mixed in every aspect of life’. 

Prasad does concur with this motion that the prime idea seems to be ghettoization. Pointing out, that in Kerala, unlike north Indian states, Hindus and Muslims live together and that such a measure is a hate campaign against Muslims and Christians targeted at creating ghettos. 

Wednesday, July 21st, 2021.