Autonomy for bank chiefs

Apropos ‘Strengthen your board: RBI message to banks’ ( February 17), the banking regulator reportedly nudging banks, specially those in private sector, to rope in ex-bankers for the chairman position, for ensuring that the board doesn’t end up being a rubber stamp, seems to be the need of the hour. Interestingly, it also goes on to add that if the chairman has strong financial services sector expertise and can act in an independent manner, it would strengthen the quality of the board.

This RBI suggestion could not have come at a better time as the current chairmen are due for reappointment and most banks are currently roping in academicians and multi-disciplinary professionals including former civil servants into the board. But it hasn’t yielded the desired results.

Bank chairmen and CEOs must enjoy full “autonomy” to deal with episodes of financial crisis.

SK Gupta

New Delhi

Learning lessons

Two news items in today’s papers need close examination : Seeking a bail out by IMF, Pakistan raises petrol price to ₹272/litre and Sri Lanka hikes its power tariff by 275 per cent.

That we had long kept fuel prices elevated at the pump level with high taxes to augment revenue was prudent. It is the power sector where we have not been pragmatic. States have been increasingly doling out free power to housing and farming sectors.

States must learn lessons from our neighbours’ fiscal crisis driven by unaffordable subsidies.

R Narayanan

Navi Mumbai

Taxing times

It refers to ‘Is there a way to boost the tax base?’. If only 1.2 per cent of our population is paying taxes to fund our infrastructure, welfare schemes etc then it is a serious cause of worry. Taxing agriculture, due to political reasons would never be considered.

There is no doubt that the GST system should be leveraged to the maximum so that gradually we have a bigger pool of taxpayers coming into the ambit. Otherwise taxing just 1.2 per cent of population is not justified.

Bal Govind

Noida

Competition in the skies

This is with reference to ‘IndiGo girdles up for competition after Air India mega deal’ (February 17).

After the skies were opened up for private airline operators a number of companies floated carriers but most of them had to fold up.

Air India too was down in the dumps till the government sold it to the Tata Group, who are working hard to turn the airline around.

The recent mega order placed by Air India is an indicator of its rising fortunes and its expansion plans.

IndiGo seeks to keep pace with Air India and this should ensure that there is competition for Air India in the days ahead.

However given the Tatas’ expertise in running an international airline, IndiGo will find it a tough proposition to match strides with Air India.

CV Aravind

Chennai

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