The one-day strike by employees of 27 PSBs has severely affected normal banking operations. The wage revision for bank employees due in November 2012 is in a limbo on account of the Indian Banks’ Association (IBA) not conceding anything above 11 per cent against the 23 per cent hike in pay revision sought by the bank unions.

Viewing it dispassionately, the demand is justified, considering the steep rise in cost of living in the past few years. Further, if the wage revision due in November 2012 is yet to be finalised, the IBA is responsible because while the bank unions have scaled down their demand from their original 25 per cent increase to 23 per cent, IBA is sticking to its unreasonable offer of 11 per cent.

One hopes IBA and the Central government will soon come out with an acceptable offer to avoid an indefinite strike by bank employees which, at the moment, looks inevitable.

Tharcius S Fernando

Chennai

Misleading argument

With reference to Abhirup Bhunia’s observation in “Financial inclusion needs another model” (November 12), I disagree that the mounting NPA of PSBs is mostly because of priority sector loans (PSL). In fact, the top 500 corporate loans with a credit limit of above ₹10 crore constitutes over around ₹70,000 crore of NPA in the banking system.

Though banks achieve their PSL targets set by the Government mostly by high-yielding, secured PS loans like housing and education to improve their bottomline while achieving the PSL targets, poor implementation, non-completion and failure of projects financed under PSL take a heavy toll, creating huge NPAs. A bulk of the NPA under PSL is secured with tangible assets. This is the reason why the poor are still poor and have not been able to come out of BPL despite banks achieving their PSL targets all these years. Though writing-off huge PSL credit is significant, it is not as bad as the concessions extended under one-time settlements to non-PSL borrowers. Hence, blaming the PSL only for the NPA menace is not justified.

MA Khan

Chennai

Cut costs differently

This is with reference to “The great un-banked” by R Srinivasan (November 13). Banks have benefited most by technology driven services in terms of enormous savings on cost of operations. There is growing use of self-banking services, saving banks expenses on manpower, rental space and other infrastructure.

Now the tendency of banks to introduce charges for every services will discourage small savers from using the banking system, and that goes against the Government’s drive for inclusive banking. Instead of charging for ATM and SMS alerts, banks should save on paper work, postage, storage space and so on. This way they will be able to extend benefits to customers by extending services without charges.

It is well within the capability of the RBI to advise banks on these lines instead of allowing them to charge as they like. The regulator has the duty to ensure that retail customers do the banking without feeling the burden. Banks should improve efficiency with technology support and look up to improved earnings through better recovery of funds lent and observing economy on avoidable expenses.

R Narasimhan

Coimbatore

Reduce interest rates

With reference to the editorial “The writing on the wall” (November 13), the impact of a deficient monsoon may not be so alarming. Banks’ credit growth is muted and corporates are waiting for reforms. Crude prices will continue to be low unless the pressure of low inflation in the US and EU makes their policymakers work towards weakening the currencies again to infuse inflation.

Any stimulus by the EU to perk up its economy would strengthen the dollar which would again reduce commodity/crude prices. While this will take time to control, weak demand and over-supply will keep crude and commodity prices under check. The RBI’s target inflation of 6 per cent by March 2016 seems to be achievable and hence the RBI should reduce interest rates in December.

Sridhar Narasimhan

Email

We need quality

Infosys CEO Vishal Sikka has pin-pointed where the Indian IT industry is lacking. Managements take it for granted that those who are hired, and not given much training, will come to know everything on the job. Instead of higher quality, there is greater emphasis on getting ‘cheap’ labour. Many projects end badly, specifically fixed time, fixed cost projects. This not only loses further business for the company, it also tarnishes the image of the country’s IT industry. Indian bellwethers and pioneers should take serious action on this and concentrate on quality.

Rahul Nanavaty

Bangalore

Individuals count

“The great un-banked” by R Srinivasan (November 13) exposes banks’ attitude to retail customers, who are treated as cost to bank. Individual customers are the principal source of revenue generation by banks and no bank can do business without them. Individual customers pay for every service. A small so-called priority loan has sovereign guarantee of revenue recovery while huge loan defaults by industrialists decorate balance sheets of banks as NPA, eroding the bank’s net worth. Non-discriminatory banking service to all customers must be the ultimate goal of Jan Dhan Yojana.

KVA Iyer

Kochi

Uneven recovery

With reference to the editorial, “Writing on the wall” (November 13), economic recovery in India still uneven. Key interest rates have persisted far too long. We must admit that RBI interventions on checking money supply as a tool to rein in inflation have elevated the borrowing costs and the global economic stasis is impacting trade and input costs. It is true that the fiscal picture is getting to be incrementally better but the ongoing monetary policy has apparently lost traction. The conservatism of the RBI to key rates was no different when food inflation was at 16 per cent.

The Government must put its house in order. Cosmetic and marginal reduction in fuel prices is fringe decoration. Though the Government is desirous of an upward GDP targeting, it is yet to marry divergent requirements, both monetary and fiscal, to spell out a road map tying policy to specific goals. Perhaps its attentions are more on bolstering the political environment and less on the economic one.

Operating on a different frequency, the RBI seems obsessed with external economic ambience and rupee-dollar value. Our IIP has remained below potential for long. Banks have the money, but lower rates would help lubricate the gears of transmission of this idle liquidity to assist growth. There is a strong case for easing the rates for the larger goal of boosting our under-utilised manufacturing sector .Clearly a ‘forward guidance’ on monetary policy by the RBI is overdue.

R Narayanan

Ghaziabad, Uttar Pradesh

Brazen discrimination

The Aligarh Muslim University (AMU) dictating that girl students cannot use the library is preposterous to say the least. When the nation is pushing the education of girls, AMU’s decision is nothing short of retrograde. The HRD Ministry has done the right thing by calling for explanation from AMU by quoting that “educational and Constitutional rights are same for all”. It is time the AMU rescinded the decision forthwith to put an end to this brazen gender discrimination.

HP Murali

Bangalore

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