A new insurance venture

This is with reference to the editorial “Crossing the insurance hurdle” ( Business Line, May 28).

The refusal by the Europe-based P&I Clubs to provide insurance to tankers carrying Iranian Oil to India and denying India's request for exemption, has triggered the formation of an Indian P&I Club.

This has been done taking into account the possibility of increasing the quantum of tonnage in Indian export and import cargo and the coverage of shipowners from other counties.

This will be feasible if the suggested P&I Club has a clear vision on risk management.

The time has come to think more of an Indian-based P&I Club with non-profit motive to give insurance coverage to ships carrying crude oil from Iran. A good track record of such clubs may attract foreign shipowners and bring them into the P&I Club net in future.

N. R. Nagarajan

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Minimum balance

This refers to the report “3 pvt banks to insist on minimum balance every month” ( Business Line , May 27). Insistence on minimum balance of customers by the commercial banks is one of the best ways to enhance savings and thereby capital formation in the country, where the ‘marginal propensity to consume' is very high. At the same time, banks that fine the customers for not maintaining the minimum balance, must reward the customers who meticulously maintain it.

The interest rates offered in savings account by the nationalised commercial banks is so low that it discourages people from savings in that account.

S. Ramakrishnasayee

Ranipet

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