Tackling NPAs

This refers to ‘With rising NPAs banks take foot off pedal on Mudra loans’ (March 12). It is unfortunate that the Indian banking industry, considered to be one of the strongest in the world, is now grappling with NPAs (non-performing assets), a problem largely due to wilful defaulters and political pressure.

Measures need to be put in place to arrest this downward slide, and the deceleration of lending is definitely not the answer. A strong banking sector is important for a flourishing economy. There should be a monitoring agency to ensure that the directions of the RBI are obeyed scrupulously.

The government has to act firmly if it wants to send out a clear message that it means business as far as putting an end to the burning issue of NPAs is concerned. Political interference in decision-making in public sector banks is the root cause of the NPA mess.

The Election Commission has launched a new ‘Citizens Vigil’ or CVIGIL app for the benefit of voters ahead of the general elections. The app has been launched with a primary focus to enable the citizens report any instances related to non-compliance of Model Code of Conduct (MCC) during the elections. The app further acts as an effective feedback mechanism for a voter to reach out directly to the Election Commission.

The effort made by the EC to monitor voter feedback effectively through apps is welcome, but it benefits only smartphone-savvy users especially in urban and semi-urban areas. A novice voter has no other way to reach out to EC other than the newly launched app. The EC should now strive to open all possible digital and offline modes of communication to further strengthen the voter feedback mechanism.

The EC should initiate various effective communication tools like a dedicated postal mail box, an (nodal officer based) email id, toll free SMS feedback mechanism, social media handles and also a new single window website to register only the feedback (similar to CPGRAMS portal).

Bengaluru

At a time when regulators are taking every possible step to curb the mushrooming of unregulated deposits and Ponzi schemes in the economy, initiatives by internet messaging companies, to leverage the existing consumer-base and make inroads in the crypto-currency segment, is questionable. Although there is a relatively greater viability/feasibility of success as existing mainstream consumers can be easily encouraged to accept a digital-coin, authorities ought to be remain cognisant of the continuing decline in some of the leading virtual currencies, over the last year or so.

That said, it is time to expedite the launch of an alternative crypto-format digital-currency, with improved transparency and norms on asset-categorisation, valuation, taxation and end-use. The underlying technology has found application in management of treasury and working capital, settlement among subsidiaries and payment to vendors/suppliers.

New Delhi

In its quest to abide by the government’s/RBI’s directions, the SBI’s decision to link savings bank interest rate to the repo rate, that is, repo minus 2.75 per cent which amounts to 3.5 per cent, is unjustified.

With wide network and a huge business, especially after the merger of associate banks, SBI can afford to sync the rates. But banks with low business will be hit further if they follow in SBI’s footsteps.

While SBI with its dominant position and comfortable credit-deposit ratio can afford to offer lower rates on its savings accounts without denting its CASA deposits, the same cannot be said of other public sector banks who have lost deposit share to private banks at a furious pace the last five years.

Hence, the SBI move may force its peers either to pay high floating rates on their savings accounts or refrain from floating them.

Bheemavaram

LETTERS TO THE EDITOR Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.