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This has reference to the editorial “Boosting Liquidity” (Business Line, October 14).

Even during the Asian crisis, experts in economy had commented that India was not affected by throwing open the flood- gates of reforms, because of a strong central banking system and regulated financial system.

Now we are forced to understand that the so-called development economies were lopsided in their approach, which has contributed to the present global catastrophe.

The sum total of all the bailout packages are much above the real GDP size of many developing countries.

The RBI can take pride in the fact that being “conservative”, it has stopped the tentacles of disaster from spreading into our country.

Now that we have found some remedy for the liquidity problem (still more may come), the public money of Rs 60,000 crore is to be used judiciously by banks for development purposes.

Further intervention from the RBI is most welcome in channeling these funds to productive uses than allowing their misuse for speculative activities.

Many projects awaiting take off should to be attended to immediately.

P. K. Viswanathan Thiruvananthapuram

More Stories on : Letters | RBI & Other Central Banks

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