Letters

Letters to the editor dated September 27, 2019

| Updated on September 27, 2019 Published on September 27, 2019

Trump in a bind

That US President Donald Trump now faces the prospect of an impeachment inquiry for his alleged action of seeking his Ukrainian counterpart to investigate the business dealings of former vice-president Joe Biden's son Hunter in a bid to influence upcoming 2020 US presidential polls is hardly surprising. Trump’s blatant disregard for liberal ethos and secular values defining American society is well known. With most of the members of the House of Representatives and Senate expressing their support for an impeachment inquiry, the prospect for his impeachment has brightened now.

M Jeyaram

Sholavandan, TN

Loan melas

With reference to ‘Loan melas: A blast from the past’ (September 27 ), the shamiana loan melas proposed in 400 aspirational districts in the country aiming to accelerate the loan momentum may not augur well since such melas in the past were not proven to be effective. Earlier, banks were conducting so many such loan camps to tap needy loan aspirants from the retail and MSME segments to meet their internal targets, which they have stopped now because a number of such loans turned NPAs due to the lack of proper due diligence. As aptly pointed out, renewal of such melas with a direction to add five new borrowers for every one existing borrower within the limited time set not only puts more pressure on banks but may jeopardise quality lending, culminating in fresh set of NPAs.

Sitaram Popuri

Bengaluru

PMC crisis

This is with reference to ‘RBI staff co-op societies too banked on PMC’ (September 27). Urban cooperative banks are subject to annual statutory audit and bound to institute a robust audit and inspection mechanism internally to adequately cover audit of their operations and systems in line with applicable guidelines and regulations from the RBI, the apex body for controlling urban cooperative banks also. PMC Bank is no exception. When the going has been good till recently what happened suddenly is anybody’s guess. These things have become new normal nowadays. Why corrective measures were not initiated earlier on the lines of Prompt Corrective Action (PCA) even though they are not applicable to cooperative banks. A rosy picture has been presented through under-reporting of some toxic advances lent to couple of borrowers. The PCA notification from the RBI is a wake-up call for all lending institutions (despite it’s applicability) and PMC must have taken some drastic steps instead of resorting to evergreening of some advances which have become sticky.

KNVS Subrahmanyam

Hyderabad

 

Boosting growth

It refers to ‘Tax reprieve may not spur growth’ (September 27). Huge tax cut given to corporates will surely help them go for fresh capex from the money they will save going forward. Yes it will increase the fiscal deficit and the finances of States will be further skewed, but nevertheless it will not be right to reject the decision outright. But the bigger question is how to revive the economy. For that, other measures like land and labour reforms will be the key. Coming to agriculture, which is the backbone of our economy, the government should not worry about the slight increase in inflation. For example, currently onion prices are on the boil, but the government should not try to stop its export or impose some restrictions. Rather it should let farmers enjoy the benefit of higher prices.

Bal Govind

Noida

 

Mixing politics with economics

This refers to ‘Andhra Pradesh government’s scrapping of farm-loan waiver condemned’ (September 27). The decision to scrap the scheme of the previous Chandrababu Naidu-led TDP government was not surprising. One fails to comprehend the rationale behind the ‘on tap’ grant of loan waivers to the farming community with political overtones. Such ‘waivers’ have now become more a rule than exception, which does not augur well for the financial health of the nation’s banking sector.

Kumar Gupt

Panchkula, Haryana

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Published on September 27, 2019
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