‘Healthy’ seniors

Apropos the Editorial ‘Securing Seniors’ (April 24), it is heartening to note that at last the IRDAI in its major reforms removed the upper age limit of 65 years for buying health insurance. IRDA’s move will help many senior citizens to access quality healthcare.

The other reform in reducing the waiting period for the claims to be covered for pre-existing diseases from 48 to 36 months is also welcome. IRDA must also put a cap on the time taken in settling the claims where all details are fetched from hospitals.

It is now the time for the General Insurance companies in devising new health insurance policy schemes focusing on the senior citizens. IRDA must have a close watch on the new schemes that the insurance companies would float are affordable by the senior citizens.

RV Baskaran


Liquidity oscillations

This refers to ‘Banks should be ready for higher for longer rates’ (April 24).

Short-term oscillations in liquidity of banking system, ‘frictional liquidity’, can well be managed by Reserve Bank of India using Marginal Standing Facility (MSF) or variable repo rates (VRR) or variable reserve repo rates (VRRR). As banks have Contingency Funding Plan as a fallback mechanism is case of temporary tightening of liquidity, the banking system must have alternative options to RBI interventions.

Maintaining a Liquidity Coverage Ratio at such high levels may not do good in the long run .

Forcing higher liquidity holdings at banks with liquidity suppliers that have the ability to overcome frictions in times of crisis may impact the financial system’s ability to deal with liquidity problems.

PD Sankaranarayanan

Kumaramputhur (Kerala)

Cheap money spawned a fiscal madness and cavalier lending, which then led to the NPA crisis. PSBs cumulatively wrote off ₹11 trillion from 2015 to 2023.

The lessons of cyclical depression in world economies are too evident — cheap money, excess credit, excess debt and huge deficits. Universally and across cycles, fiscal discipline has become mandatory and monetary policy would restrain financial markets from irrational exuberance. Every nation and its central bank is now compelled to revive its traditional tight money policy.

The lack of it led to huge debt pile ups, currency devaluation and recession. But then we revert to our merry ways, the moment inflation tends to turn a wee bit benign, which will depend on the duration of ongoing geopolitical predicament.

R Narayanan

Navi Mumbai

Strong fundamentals

That net Foreign Portfolio Investment (FPI) in India’s equity and debt markets stands at $41.6 billion (cumulative) in 2023-24 and it is the highest since 2015-16, according to RBI suggests that the Indian economy is on the right track and its macroeconomic fundamentals are really strong.

What is more surprising is that the foreign investors are impervious to elections and political scenario in India.

Probably, they feel India is in a better situation politically too. Investment, after all, is an act of faith.

S Ramakrishnasayee