Bad bank idea

With reference to the editorial “A bad idea” (June 18), the proceedings under the Insolvency and Bankruptcy Code are unlikely to result in the recovery of bank NPAs in a time bound manner thanks to the unexpected legal hurdles springing up. In this context the revival of the idea of a bad bank has some merit. In the larger interest of the economy there is an urgent need to unshackle the banks from the past legacies in a defined time frame so as to enable them to focus on fresh lending. The unrealistic directives from the RBI are smothering bank officials.

The bad bank and IBC need not be seen as mutually exclusive. The possibility of banks nursing themselves back to health in the near future through recovery, even with the backing of IBC, appears remote.

Kannur

The resolution to the crisis in Delhi appears to be nowhere in sight. At the outset, it has to be stated in clear terms that the protest by AAP was necessitated by the adamant refusal of Lieutenant Governor Anil Baijal and IAS officers to co-operate with the Delhi government for ‘political reasons’.

There is no way the top echelons of the civil services can defy or disobey an elected government. Civil servants are paid employees and they exist to do the work assigned to them by the government accountable to the people.

The nub of the matter is that the central government thinks its differential treatment of AAP government is politically justified.

It was significant that four Chief Ministers urged Prime Minister Narendra Modi to follow “’cooperative federalism” and intervene to break the impasse. It was puzzling that the Delhi High Court, which raised the question of authorisation to hold the dharna and pulled up AAP, did not deem it necessary to question the LG’s blatant positioning as a parallel power and IAS officers’ ill-disguised non-cooperation with the AAP government.

Now that Arvind Kejriwal has reached out to the IAS officers, they should reciprocate and return to work lest people will think that they are used as political pawns.

Maruthancode, Kanyakumari-Dt

With reference to “Delhi’s dirty dharana politics” (June 18), the protest by the Delhi Chief Minister and his ministerial colleagues against Lieutenant Governor Anil Baijal over administrative issues is nothing short of theatrics of absurdity. His predecessor Sheila Dikshit during her 10-years tenure did not have any issues with the L-G as she was well aware that unlike Goa or Puducherry, different powers in Delhi as per Constitution. The alleged attack on the chief secretary of the State by the AAP MLAs some time back may perhaps be the reason for them not to attend the meeting due to fear of assault. The approach of the people at the helm of affairs should change for the better to ensure that the wheels of administration move smoothly.

Bengaluru

With reference to “Delay in resolving Insolvency cases has cost banks ₹25,000 crore” (June 18), the notional calculation appears to be on the high side considering the haircuts involved. Assuming 40 per cent average realisation on these assets, the interest on ₹2 lakh-crore at 10 per cent works to ₹8,000 crore. Banks would not have recovered this amount as well, even if the accounts were allowed to continue in the normal course in the banks’ books.

Let us remember that all these accounts were restructured under CDR. A second restructuring or resolution through the various schemes of RBI could not be completed for various reasons including the reluctance on the part of borrowers.

Also, there were no cash inflows towards interest in any of these accounts. As on date, no ARC worth its name has adequate funds to bid even for one of these large loan accounts as they have to pay a minimum of 15 per cent of the bid amount in cash. In the above circumstances what is the way out, except looking forward to the only resolution available through NCLT, even if it is delayed?

Coimbatore

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