Evergreening of loans

This refers to ‘Fund of problems’ (December 22). The restrictions brought in by the RBI in mandating regulated entities like banks and NBFCs to make 100 per cent provision in the case of those borrowers on whom AIFs too have exposures in the form of equity/debt investments is a well-thought-out actio. It will help curb evergreening of loans resorted to by these institutions.

But looking at the legal structure of AIFs, by and large they are unregulated. The fact that most of them do not call for public scrutiny indicates that investments made by regulated entities who deal with public funds need to strictly avoid investing in AIFs which lack transparency in their dealings.

Srinivasan Velamur

Chennai

Right move by RBI

Apropos ‘Fund of problems’ (December 22), the RBI has rightly clamped down on the evergreening of loans by banks and NBFCs through their investment in Alternative Investment Fund. AIFs get the fund from such regulated entities and lend them to the borrowers to refresh their old loans by part-payment.

This way, NPAs don’t get reflected in the books of regulated entities. These entities risk depositors’ money by investing in AlFs and extricate themselves from the NPA problem.

The ones who bear the brunt are depositors.

NR Nagarajan

Sivakasi, TN

New virus variant

The recent mild spurt in Covid-19 infections, largely driven by JN.1, the new sub-variant of omicron, has rightly prompted the Centre to issue an advisory to States to ensure preparedness and enhanced surveillance. Though the JN.1 variant has high transmissibility and increases immune escape capability, evidence from countries that have reported a spike in cases and hospitalisations driven by the JN.1 variant does not suggest higher fatalities. Since Covid deaths in people with co-morbidities are still being reported, States can make it mandatory for the elderly to wear masks in public spaces. Strengthening genome sequencing for novel variants is vital.

M Jeyaram

Sholavandan, TN

Depleting reservoirs

Apropos ‘Reservoirs’ levels down 11th week in a row’ (December 22). With scanty South-West monsoon and high possibility of El Nino, this adverse situation was expected and authorities were supposed to have taken due precautions. With ministries getting busy with elections, farmers’ woes may not get priority. State governments must prioritise and plan conservative irrigation methods so as to avoid total breakdown of farm activities.

Rajiv Magal

Halekere Village, Karnataka

Agriculture overlooked

The contribution of agriculture to GDP, which was around 50 per cent in 1940s, has come down to 15-17 per cent now. India is still known as an agrarian economy that gives direct or indirect employment to a majority of the population. Agriculture has not got the priority given to the industrial sector.

The farm sector needs to contend with withdrawal of farm subsidies, etc. Farmer suicides explain the growing apathy to the agriculture sector.

AG Rajmohan

Anantapur, AP

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