On expected lines

It is clear from the mid-quarter review of credit and monetary policy announced by Reserve Bank of India (RBI) on March 17 that the central bank would like to continue with the anti-inflationary stance, keeping in mind the high food inflation.

Hiking both the key policy indicators — the repo and the reverse repo — by 25 basis points each is an indicator that the RBI does not want to hurt the growth momentum gained even while keeping inflation under check.

There are uncertainties looming charge on the global economic front in terms of increasing oil prices due to turmoil in West Asia and especially the unfortunate catastrophe and ensuing events in Japan that have sent shocks and shivers across the world. The RBI has thought it fit to wait and watch as it would be too premature now to make any assessment of the micro-economic consequences of this terrible disaster.

It is a carefully-thought-out policy review aimed at ensuring stabilisation even while striking a fine balance between growth and inflation.

S. Umashankar

Nagpur

Entry load ban

While agreeing with you that “SEBI should stick to its guns on the entry load ban in the best interests of investors”, the methodology of calculating the fee payable to the asset management company may also be reviewed.

At present, the fee is calculated at certain percentage on the net assets of the mutual fund and not on its net income (for the period).

In this context, it is to be noted that the base for calculating managerial remuneration of our corporate captains is the net profit, and not net assets, of the company (subject to minimum remuneration, in case of loss). The new SEBI chief may examine afresh, in the interest of mutual funds, whether this is worth emulating.

K. Mundanad

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