Digital banking

This is with reference to ‘As digital banking grows, branches get smaller’ by Beena Parmar (November 18). Even in Tier-I cities digital banking is not used optimally by customers. A majority use plastic cards alone alone. Most customers activate the digital self- service banking technologies on the day they open their accounts, but without knowing to operate them. What strategies will banks employ to deal with this?

It is commendable that SBI plans to set up its InTouch Lite branches, and it has implemented tech-learning centres to raise customer awareness of digital banking. But these centres are not running effectively.

Banks have failed to analyse customers’ attitude to innovative banking services. They have to communicate with their customers in simple ways; only then will digitalisation succeed. Employees also need to be trained effectively because they are not able to answer customers’ questions and rectify their problems.

Bulomine Regi S

Tirunelveli, Tamilnadu

NPAs, funds and banks

It is heartening to note that the government expects to have in place an insolvency tribunal and appellate authority by December (November 18). The growing NPAs have started shaking the roots of the banking industry. On the one hand there is a demand for credit outflow and on the other, reduction of interest rates.

Banks traditionally provide fund-based and nonfund-based facilities to customers, who are normally industrialists or entrepreneurs. Banks should follow the principles behind source of funds and application of funds. Due to core banking system (CBS) and communication network technology, the fund is transferred quickly from one account to another. But banks are not able to monitor the end use of funds with the same alacrity. This leads to borrowers using the fund for purposes other than the reason for which it should be used. This is the main source of NPA.

Secondly, borrowers usually get the allocated fund at one go. The banks should release funds incrementally depending upon the need of the project and the progress made in the implementation of the project.

According to the terms and conditions of Bank Guarantees (BGs) and Letter of Credit (LC), documents should be thoroughly checked before funds are released. When delays take place, the escalation of costs cuts the size of credit flow into other projects. Like CIBIL ratings for individuals and credit rating for companies, the government should inform the public about each and every project, the original cost, escalation cost and any delays. It is the responsibility of every individual involved in the project, as also the government, to make sure there is focus. The lenient law and delayed judicial system add to growing NPAs.

SA Srinivasa Sarma

Hyderabad

Avoid the obvious

This refers to ‘The other messenger’ by Leonid Bershidsky (November 18). The ISIS knows they cannot win a physical war and what they are up to is propaganda war. They know that Muslims in the West are moderates and by carrying out attacks like the one in Paris they are trying to set off a severe backlash against western Muslims so that they will be driven into the arms of ISIS. The western powers should plan attacks to take out specific targets.

If western powers bomb the territory held by ISIS, resulting in civilian casualties, it will only play by the ISIS plan. ISIS has killed more Muslims than anybody else but it will play this savior card to its advantage.

Calling for the destruction of mosques in France, as some irresponsible people are doing, will only exacerbate the situation. This is the time for tolerance and not hate; the world powers should not play into the hands of ISIS in their propaganda war.

CR Arun

Email

Erratum

In the report titled ‘Ratan Tata invests in news portal Yourstory.com’ (August 17, 2015), it was stated that the company charges a fee to feature startups and budding entrepreneurs. Yourstory.com has clarified this is incorrect and that no payment is involved. The error is regretted.

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