This refers to the report on the RBI issuing guidelines on payment banks and small banks (July 18). The RBI has prescribed a capital adequacy ratio of 15 per cent for payment banks. As the proposed bank can only invest in government securities and no lending is permitted, this clause is unnecessary. Its outside liabilities cannot exceed 20 times of net worth, which takes care of the interest of depositors.

As these banks can take only demand deposits, to maintain liquidity, a substantial portion of deposit has to be kept idle. They have to maintain CRR and SLR also. What is left can only go to government securities. One wonders how these banks will be able to pay interest on deposits.

S Kalyanasundaram

Chennai

The RBI’s guidelines are a welcome step, which is an essential measure towards meeting the objective of financial inclusion. But the guidelines should be more prudent, and let this not be a repeat of the Local Area Banks, a concept that was launched some years ago.

Lakshminarasimhan

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Culprit capital

The rape of a school child in Bangalore is shocking. Is Bangalore becoming the crime capital of India? Karnataka should lose no time acting against criminals. It is too much to expect from power hungry politicians. But something needs to be done to arrest the deteriorating safety levels in the State, especially in Bangalore. If need be, the Centre should intervene.

VS Ganeshan

Bangalore

Jinxed airline

The alleged shooting down of the Malaysian airliner, flight MH 17, over Ukrainian airspace is atrocious. Innocent lives have been lost for no fault of theirs; the incident considerably raises the stakes between Kiev and pro-Moscow rebels in which Russia and the West back opposing sides. MH 17 is the fourth casualty in a list of Malaysian Airlines aircraft to be so jinxed. That the incident comes close on the heels of the mysterious disappearance of flight MH 370 makes it all the more tragic.

NJ Ravi Chander

Bangalore

Food for all

This refers to “US wants food programmes of developing nations reviewed” (July 18). The US has called for a review of the food security and procurement schemes of developing countries, including India, by the WTO, and that the US is trying for trade facilitation pact without giving anything in return. It is a fact that food security and procurement programmes of one country should not distort trade or affect food security of other countries. Also, a ‘permanent solution’ to resolve public stock holding issues is essential. Such a promise was made at the Bali ministerial meeting by the US.

The WTO’s ‘Green Box’ of permissible subsidies should include incentives for food procurement and aid. The base year of calculating subsidies should be changed regularly to allow much higher levels of sops and to ensure real value. Border infrastructure must be improved to facilitate movement of goods. Measures must be taken to ensure that trade distortions do not occur. The aim should be to ensure food for all.

TV Jayaprakash

Palakkad

Deal with the dragon

“Dealing with an ‘expansionist’ China” by G Parthasarathy (July 18) is highly informative and sends a cautionary note to the Centre. The 1962 aggression of India by the country shortly after proclaiming “India Chini Bhai Bhai ” with Jawaharlal Nehru is an unforgettable piece of history. Even now, exhibiting friendship outwardly, China is holding fast to its claims of parts of Tibet and entire Arunachal Pradesh. This calls for caution in dealing with that country.

TR Anandan

Coimbatore

China is a challenge for us in foreign policy and we should face that challenge head on. For this, we need to have a strong economy based on producing what we need. We can’t import pencils and furniture from China and expect it to respect us. The trade policy with China needs a big overhaul.

CR Arun

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