Repo’s an indicator

This refers to ‘Banks need a stiff dose of competition’ by Jaideep Iyer (September 25). People often talk about transmission of interest rate and they expect the lending rate of banks to move in tandem with policy rate changes. Banks lend from deposits mobilised and not overnight borrowing from RBI.

The policy (repo) rate is applicable only for overnight borrowing. As of September 1, 2017, banks have lent ₹80,139 billion, out of deposits and borrowings of ₹1,10,401 billion. Borrowing under repo rate from RBI was hardly ₹26 billion.

Reduction in repo rate is only an indication to banks to reduce interest rates; they have to start by reducing interest rate on deposits first and then on credits. This will take time and will lead to losing the deposit base.

S Kalyanasundaram

Email

If DeMo was an uncalculated risk, GST was a calculated one. The setback is since seen to be higher. The spin put on GST — that it is good and simple — has turned out to be neither. The filing of returns needs the expertise of CAs who are now in great demand and pressed for time. As a result money circulation is held up choking small and medium businesses. The big ones now show high debt-stress, upsetting an overall lending regime that is turning inelastic to rate cuts. The next two quarters may reveal if growth was indeed sacrificed for policy optics.

R Narayanan

Ghaziabad, Uttar Pradesh

Merkel’s challenge

The triumph of Angela Merkel in the German parliamentary polls which saw her return as Chancellor for the fourth time is truly significant despite her losing some appeal among voters. For the first time in more than half-a-century, a far-right party has gained entry into the German parliament with a conspicuous 13.1 per cent vote share. As a leader who embraced refugees from wartorn nations , Merkel has her task cut out to combat the challenge and reassert the liberal values that define the character of the EU.

M Jeyaram

Sholavandan, Tamil Nadu

Why the bullet train?

Trains in India are not very fast. Thus, the introduction of high-speed bullet trains is welcome. But what happens if tickets are not available in times of emergency? In India, the number of train passengers far exceeds the seat available. Tatkal tickets are too expensive and there is no concession for senior citizens. The scheme should be abolished. The quality of service in trains is often poor. Trains are dirty. Train travel should be made hassle-free. Platforms and toilets should be kept clean.

Mahesh Kapasi

Email

Throw some light

In some new two-wheelers, the headlights glow automatically the moment the vehicle is started. When natural light is available aplenty, why do we need this feature? Besides, the battery drains out faster this way.

HP Murali

Bengaluru

Water fights

A few decades back nobody would have imagined that water would one day create so many problems. Under normal conditions water is used to douse fires but now water has become the cause of many fires.

It would take hundreds of litres of water to douse the fires at many places. Wars may be fought over water as it is unevenly distributed across the globe. Water is a universal solvent, but one wonders when people will dissolve their differences over water and resolve issues amicably before it reaches boiling point. Will interlinking rivers solve India’s water crisis, or lead to more disputes?

TS Karthik

Chennai

Garden of ideas

This is about ‘Place of learning or piece of real estate?’ by Narendar Pani (September 25).The prime concern is that the university should be within the reach of potential students; it’s for this reason that grants and special prices come into the picture. Who thinks about freedom of ideas and innovative thinking? We must think beyond degrees to make education meaningful.

Bal Govind

Noida, Uttar Pradesh

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