Rupee depreciation

This is with reference to the article “Allow the rupee to depreciate” ( Business Line , February 22).

The author feels that the rupee should be allowed to depreciate to as low as Rs 70 per dollar.

However, he has ignored the impact on inflation that a 30 per cent depreciation of the rupee would have.

It is well known that India imports a huge quantity of crude oil (even after counting rupee imports) and edible oils.

Even a marginal deprecation of the rupee would result in a sharp increase in prices and impact the common man. As it is, the common man is struggling to make both ends meet.

What prevents the Government from getting back funds illegally stashed abroad? The funds can be kept in a no lien account in India and dealt with on merits.

This would considerably ease the pressure on its foreign exchange reserves. Why has the RBI not made its stand clear on this?

K. V. Natarajan

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Loan defaulters

This refers to “Crack down on wilful loan defaulters” ( Business Line , February 22). There are two types of defaulters in the world of finance.

One, those who default wilfully and, two, the ones who become defaulters because of continuous negative cash flows and circumstances.

Against the backdrop of a rise in gross NPAs and the drastic increase in CDR, a further rise in NPAs is on the cards. It is imperative for the lenders to crack down on wilful defaulters without any delay.

This might help banks recover some of their dues and send the right signals to the market -- that any company which can pay up, but is unwilling to do so, will have to face the music.

Bal Govind

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