The RBI has cut the repo rate by 25 basis points. It has led to the hope that banks will effect similar reductions in their lending rates, especially in relation to housing and personal loans. Past experience does not support this view. Except for a few,  most of the banks do not have the comfort of lowcost CASA deposits and are locked into high-cost term deposits and hence are under pressure to maintain the existing lending rates for some more time. The rising NPAs is a deterrent to any reduction in the rate of interest as banks would like to recoup their losses from good customers paying high interest. 

Ideally the central bank action can be effective when the system is short of funds and has to approach it for assistance. There is no dearth of liquidity in the system. The repos of ₹192.94 billion, outstanding as on February 20, 2015, were matched by more or less an equal amount (₹192.87 billion) of reverse repos. However, term repo/overnight variable rate repo went up to ₹500.06 billion from ₹306.96 billion as on February 18. As a result, the net injection into the system was ₹500.79 billion from ₹435.72 billion.

The call money rates are close to policy rates. The general problem is lack of demand for credit. Incremental investment-deposit ratio was 41.49 per cent, as on February 6, 2015, compared with 27.85 per cent, as on February 21, 2014. Cash-deposit ratio was 4.90 per cent against the stipulated 4.0 per cent.

A Seshan

Mumbai

Since price levels depend on the industrial and agriculture sectors which in turn depend on interest rates, the RBI's move is good. The response of the share market to the interest rate cut is an indication of the favourable impact on the industrial sector. It’s a step in the right direction.

TR Anandan

Coimbatore

Too much hype

The media has given so much hype to the national executive meeting of the AAP and tried to create storm in a tea cup, as if the removal of leaders from party forums is taking place for the first time in the country. A sea of people assembled in front of the venue of the meeting and appealed to the party to stay united.

This bottom up phenomenon is unique in Indian politics. Let us not forget that after the last Lok Sabha election, the BJP sidelined its senior leaders and rejigged its decision making body to suit its leader. No doubt both Yadav and Prashat Bhushan are an integral part of the AAP and their expertise will be utilised in a more focused manner. The bigger challenge is how the AAP will implement its poll promises.

Ettirankandath Krishnadas

Palakkad, Kerala

It’s our mindset

This refers to ‘Mirror, mirror’ by Veena Venugopal (From the Viewsroom, March 5). The remarks made by the accused are not not surprising. This attitude is widely prevalent in our society which has no respect for women.

A documentary cannot be banned in this digital age. We as a society are responsible for the unsafe conditions for women that prevail. The government plays a key role when it comes to safety; it is clear that the government needs to stop talking and start acting. When we cannot change the thinking of men, what is banning a documentary going to achieve for women’s safety and India’s image?

CR Arun

Email

An effective bridge?

Hopefully MUDRA is going to be the bridge to the untapped potential of the Indian economy (‘MUDRA Bank: The indigenous financial engine’ by S Gurumurthy, March 5). But this effort to aid micro businesses should also be reflected in the laws. The regulation of FDI in retail is of utmost importance, since micro businesses will be at stake with their introduction.

The policies of the government need to constantly re-affirm their commitment to this sector since it provides employment to the poorest of the poor. Micro businesses such as handloom and handicraft have given a distinct cultural identity to our country. With effective implementation of the MUDRA scheme, India would definitely revive its economic and reclaim its cultural glory.

Gopichand Paturi

Hyderabad

Greenhorn blues

The aim of a political party in the country, which is a multi-party democracy, is not only to win elections but also to keep its members intact and offer tough defence against the Oppositions’ criticisms and intimidations. But the dismal way in which the AAP is progressing, thanks to the avoidable rift within its key members, is really unfortunate. The AAP is a greenhorn in the difficult political landscape. Unless it sets its house in order, good governance is impossible. The BJP and the Congress — political masters — must be enjoying these developments.

S Ramakrishnasayee

Ranipet, Tamil Nadu

The AAP has made the right move by sacking its senior leaders Prashant Bhushan and Yogendra Yadav from the PAC of the party. The two were on a collision course with party convener and Delhi chief minister Arvind Kejriwal and are believed to have made efforts to unseat him, besides working against the party’s interests. The power struggle within the ranks of the fledgling party which stormed to power in Delhi had also threatened to split the party down the middle. One hopes that now the party will ride over the storm and settle down.

NJ Ravi Chander

Bengaluru

Criminal minds

From the interview with Mukesh Singh, one of the accused in the Delhi rape case, one thing is certain: the mind of criminals will never change. The concept that a criminal’s mind will change and he will repent for whatever he has done if he is imprisoned has been proved wrong. Hence it is time to take another look at these laws. Instant and quick justice is the right way. Until the male mindset changes these types of crimes will never be curtailed.

TSN Rao

Bhimavaram, Andhra Pradesh

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