Letters to the editor February 20, 2020

The sad plight of Jabeda Begum alias Jabeda Khatun, a resident of the Guwahari village in Assam, whose claim to be an Indian citizen was rejected by both the Foreigners’ Tribunal in May 2019 and now upheld by the Guwahati High Court, once again exposes the inherent dangers associated with the NRC exercise. An expensive failure in Assam, the NRC left out nearly two million people and the ruling BJP government wasted no time to dismiss it as the majority of those excluded were non- Muslims. As the orders of Foreigners’ Tribunals prevail over NRC orders on citizenship, they must have members not only with judicial experience and respect for due process of law, but should also remain sensitive to the context in which claims are filed. Apprehensions over the functioning of Foreigners’ Tribunals and the Appellate authority for those left out of the NRC needs to be addressed with a seriousness it truly deserves.

Sholavandan, TN

This refers to the editorial ‘Tweak IBC process’ (February 20). Undoubtedly, the IBC is an effective deterrent for wilful and slippery defaulters; but at the same time, it is not a magic wand which will bring immediate relief to all stakeholders overnight. Banks are plucking low-hanging fruits by resorting to liquidation.

To expect operational creditors to showcase resolve to rejuvenate business is asking for too much in the view of the long, drawn-out process and therefore there is temptation to adopt the path of least resistance.

The IBC process needs to be split into two stages. In the first stage, all creditors must establish that why the entity cannot be revived. If all creditors are on the same page, and liquidation is the only answer, then they should go ahead with the insolvency proceedings.

Chennai

The article ‘Are mega bank mergers well thought out?’ ( February 20) has brought out apprehension of banking analysts with regard to big-bang mergers. It is heartening to note that the PMO is treading cautiously on the mergers as the priority now must be nurturing the visible green shoots in the economy. Further credit flow to small entrepreneurs and the agriculture sector is vital, and small- and medium-sized PSU banks play a phenomenal role in supporting them. In this juncture, the government may consider the August 2019 merger plan as a roadmap to future reforms, and advise the respective boards to come with a credible customer-centric business strategy and IT synchronisation plan.

New Delhi

This refers to ‘Are mega bank mergers well thought out? (February 20). One tends to agree with the author’s view stating that if the Centre has developed cold feet over the bank mergers, it may have misplaced notions on what big banks are meant to achieve. What else could explain the likely delayed issuance of the enabling notification? While some genuine delay could always be appreciated, but the reported fact that the Prime Minister now wants to have a clear idea first as to how well the earlier merger of two public sector banks into Bank of Baroda (BoB) has fared, obviously raises eye-brows. Why was this exercise not undertaken prior to the announcement of the proposed merger?

It seems that no lessons were learnt from the past dubious experiences of such mergers. In fact, author hits the nail on the head by making various ‘candid’ observations about the fallacy of government’s ill-conceived move to merge 10 weak banks with four strong banks.

He has also pointed out the travails of some ‘large’ global banks when confronted with some adverse ground realities, while revealing the success story of Bandhan Bank and several small finance banks since coasting along merrily on the strength of their small microfinance loan ‘portfolios’ having an incredible recovery rate of around 98 per cent. This evidently implies that it’s portfolios that matter the most, and not the size of any bank.

Bengaluru