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Financial sector oversight
Apropos ‘BFSI sector may face headwinds’ (March 20), the tightening regulatory actions taken by the RBI and SEBI should be seen as cautionary and preventive measures consequent to detection of certain aberrations in early stages. Left unaddressed, the issues such as un-collateralised retail lending, rigging of IPO prices and over-reliance of NBFCs on borrowing from banks would have grown bigger and adversely impacted the entire system. The timely regulatory measures have alerted the financial sector and possibly averted a crisis that was in the making. Though the growth in the personal and credit loans continued to rise in spite of the hike in risk weights, the impact of the same on bank exposure to NBFCs has been salutary with its growth rate nosediving by almost 50 per cent. It appears that the continuing robust growth of consumer and credit card loans of banks is being driven by the spike in lending to “existing and credit worthy borrowers”.
Kosaraju Chandramouli
Hyderabad
Offbeat Twenty20
The news ‘Twenty20 to contest LS polls’ (March 20) enthrals amid Lok Sabha elections. The offbeat political entity out of the corporate ecosystem is upbeat on challenging mainstream political parties in Kerala, with credentials of governing Kizhakkamabalam Panchayat in Thrissur. The youth-dominated T20 will certainly impact the election scenario but will take time to establish. If it succeeds in garnering even 20 per cent votes, it will have massive influence in future assembly elections. People want alternatives and are largely fed up with caste, religion and region-centric elections.
Vinod Johri
Delhi
Predicting risk
With reference to ‘Stressful tests’ (March 20), the regulatory measures to assess the underlying liquidity risks in the asset portfolio and directing small- and mid-cap equity mutual funds to disclose the outcome of periodical stress tests are prudent steps in safeguarding the interests of retail investors, keeping in view the redemption failures of some debt funds in the recent past. However, with ever changing market scenario depending primarily on global factors, it would be a difficult task to make accurate predictions on stress levels.
Even some big fund houses claim that investors need not take serious cognisance of the test results. As aptly suggested, the tests must be conducted and interpreted on an aggregate basis instead of the prevailing volume-based models.
Sitaram Popuri
Bengaluru
Pollution worries
Little known Begulsarai in Bihar has been declared as the most polluted city in the world. It is also shocking to learn that of the 100 most populated cities in the world 83 are in India. Breathing polluted air is harmful to health and the economic costs would be considerable.
One can understand metropolitan cities being polluted because of heavy traffic and industries. But Begulsarai? Instead of getting worked up over emotive issues, it would be better if citizens and political parties concentrated on real issues like pollution which have a direct bearing on our lives.
Anthony Henriques
Mumbai
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