Upgrading SFBs

This refers to the editorial ‘Slippery glide path’ (May 1). Regulations governing small finance banks (SFBs) and public sector banks differ on many aspects such as priority sector lending and capital adequacy. A few SFBs have been performing well now and are aspiring to get converted into universal banks. But conversion or upgrading SFBs to universal banks defeats the very purpose for which they were established.

Disinvestment, privatisation and merger are looming large in the banking arena with a view to making a stronger global presence and in having a handful of big size banks. At this juncture, inducting SFBs into the commercial banking arena does not sound good. The Basel IV norms on capital adequacy and risk assessment are stringent, and these would be hard to adhere to for new entrants. The apex bank could relax few guidelines exclusively for SFBs in the area of branch expansion and garnering more public deposits.

RV Baskaran


Low voter turnout

This is with reference to ‘In Hindi belt low turnout is a uniform trend’ (May 1). Low turnout and lack of enthusiasm among voters is but natural looking at the way our politicians are fighting over irrelevant matters, hurling abuses at each other, not touching real issues such as employment generation, improvement in infrastructure, welfare schemes, etc. The Indian voter is in a confused state of mind today, which is not good for our democracy. The Indian voter has become smart and cannot be taken for granted. The voter demands good infrastructure, jobs, economic development, and investment in health and education facilities.

Veena Shenoy


Funding of SMEs

This has reference to ‘Accessible SME finance’ (May 1). Funding of SMEs is slightly different from other entities in terms of quantum, methodology, riskiness and pricing. Timely funding is also important. However, depending on personal guarantees is not appropriate as the net worth of the guarantor may fluctuate during the funding duration and it is likely that the net worth may erode significantly if personal assets are transferred to family trusts after availing finance. The efficacy of loans against personal guarantees depend on the stability of the net worth of guarantors.

M Raghuraman


Personal guarantees

One is at a loss to know why there is so much debate about personal guarantees (PGs). After all, such guarantee demonstrates the promoter’s confidence about the success of his project. That will give more comfort to the lender than the assessed financial strength. If the promoter himself is not clear on the success of his business is it not unfair to expect funding from a bank or any financial institution? He should bear in mind that it is a business venture, not a wager.

R Mohan

Kumbakonam, TN

Vaccine side-effects

AstraZeneca admitted in court that its Covid-19 vaccine, known as Covishield in India, can cause side effects like blood clotting and low platelet count. This acknowledgement came during a lawsuit, though the condition, thrombosis with thrombocytopenia syndrome, has been documented in scientific literature. India has to ban the use of Covishield and other Covid vaccines if concerns about their after-effects are not addressed.

Vijaykumar HK

Raichur, Karnataka