Policy transmission

This refers to ‘Repo rate cuts are no magic pill’ (August 8). Banks, albeit having the onus to transmit the decisions of the banking regulator, have turned apprehensive because of the increasingly unviable business mix, especially of public sector banks. Without prodding from the government, the transmission of the policy rate cuts will continue to remain partial. Resolving issues relating to dud assets, ensuring a level-playing field for resource mobilisation and its deployment, and enhancing the financial strength of these banks are crucial to enable banks comply with the requirements of the monetary policy.

Unless the government creates a favourable climate for investors, a mere rate cut and its transmission will not suffice to boost investment. The government must support banks with more capital to expand the volume of high-yielding assets as well allow them to mobilise deposits at competitive rates of interest.

Kottayam

This refers to ‘Why rate reductions haven't lifted credit growth’ (August 9). Minus technical details, the conclusion is that lending rates have not come down commensurate with rate cuts by the RBI. Reducing interest rates on bank deposits beyond reasonable levels can have adverse social consequences like long term savings getting shifted to unsafe or insecure savings instruments outside banks and government. As banks are not depending much on the RBI for resources, the only variable which can be adjusted to reduce cost of credit may be the margins enjoyed by banks. That will involve more professionalism in fund management. The other option would be to return to regulating interest rates selectively. Probably, the Monetary Policy Committee itself may have to consider and suggest innovative alternatives to rate cuts in the coming days.

Mumbai

Climate change-induced floods and droughts have now become a regular phenomenon. Kerala is now grappling with deluge following heavy rainfall over the last few days, triggering fears of a repeat of last year’s massive flood and its resultant devastations. Floods of an unprecedented kind in Mumbai and Assam are one more pointer to the need for policymakers to turn their focus on ushering in proven scientific flood and disaster management measures on the ground to mitigate the loss of human lives and livelihoods. Zero tolerance towards encroachment of waterbodies and a policy push towards incentivising the construction of flood-resilient buildings have become a much greater need now than ever.

Sholavandan, TN

Apropos ‘Pregnancy-free lactation for cow is here’ (August 8), it may appear as a welcome news for the dairy sector. It is to be noted that most of the cattle population is already subjected to various artificial immunisation therapies to prevent health hazards and improve yield. There is also this scientific development that helps produce only female calves, which is considered a big breakthrough.

But the latest development of pregnancy-free lactation doesn’t seem ethical for one simple reason: it sees cows as perpetual milk-producing machines. This could lead to severe health issues and also abandonment of cattle at a later stage.

Sakaleshpur, Karnataka

While business leaders may have been assured by higher authorities on non-enforcement of penal provisions in case of CSR violations, it is important to discourage such violations. Businesses ought to strive hard to meet the CSR obligation, especially when the regime counts on welfare-oriented investments by corporates to boost liquidity and revive the high-growth sentiment. Enterprises, at the time of inception, cannot be allowed to get away by making promises to serve the community, without a substantiated plan-of-action to fulfil them, in the first place.

New Delhi

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