Sensible approach

Suresh Prabhu’s Railway Budget is quite sensible. He has concentrated more on improving passenger facilities and infrastructure than on giving sops. And he’s done all this without increasing fares. The proposal to sell land to prevent encroachment and increasing revenue through advertisements are steps in the right direction.

VS Ganeshan

Bengaluru

Digital is good

The government encouraging digital payments is a welcome move. There are many distortions which may have to be addressed to reduce cash/physical payments. One is the agency commission paid by the RBI to banks while handling government transactions. Banks are eligible for ₹50 per receipt for physical transaction and only 12 per receipt if it is by e-mode. Ultimately, digital payments will enable cost saving in the long run and also leave an audit trail.

S Kalyanasundaram

Email

Bad bank, bad idea

RBI governor Raghuram Rajan has said that the concept of good bank/bad bank may not be relevant for India since much of the assets backing bank loans are viable or can be made viable. He was in favour of helping the banks clean up their balance sheets, recognising it as their responsibility.

This makes sense. PSBs, which have a higher level of stressed assets, are big enough to create their own arms for tackling wilful defaulters, and where loans become irrecoverable, there may not be much gain from ‘sale’ of portfolios at throwaway prices.

What PSBs need is a clear signal from the Centre to do their business professionally. There should be a clear differentiation between social responsibility and banks’ commercial business.

MG Warrier

Mumbai

Capitalising banks

Capitalising banks is the talk of the town and many ideas are being floated. The basic issue concerning erosion in CRAR is the exposure of hidden NPAs over a period of years. Banks, especially PSBs, were pushed to fund infrastructure by the government and the RBI. But for the PSBs stepping in, the government would have funded these projects through budgetary allocation over a period of years.

PSBs funded mega projects, earned income in the early days, and paid dividend to the government to the extent of 40 per cent. The government pushed banks to pay higher dividends. Had these dividends been paid to the majority stakeholder — an average of ₹20,000 crore a year — for more than ten years, they would need no recapitalisation today and the provision coverage ratio besides CRAR would have been much higher. The government recapitalising banks is its duty as a major stakeholder. Besides, the government is only using a part of the dividend. Due allowance has to be given for the social responsibilities PSBs undertake in implementing government programmes.

S Veeraraghavan

Madurai

Discuss, don’t disrupt

The editorial, ‘Too much acrimony’ (February 24) has catalogued the problems now being encountered in the working of Parliament. The President has correctly stated that “Democratic temper calls for debate and discussion, not disruption.” People can have differing opinions but discussion is the way to resolve issues. It is worthy of consideration that a constitutional provision be made to find a lasting solution to the problem of blocking of Parliament and ensuring its smooth working.

TR Anandan

Coimbatore

Senior citizens’ budget wish

There should be ‘zero balance’ facility for all the senior citizens in their savings accounts in nationalised banks, cooperative banks and private banks. All the banks earn sufficiently big EMIs from car and home loan borrowers, as well as from current account holders and overdrafters. There should be pro-senior citizen provisions in the coming general Budget due on February 29. The famous ‘Chanakya neeti’ says that minimum taxes fetch maximum revenues to the government, which in turn also reduce corruption to a great extent.

Hansraj Bhat

Mumbai

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