Letters to the editor dated April 27, 2020

Apropos ‘RBI likely to revisit prudential norms’ (April 27). At a time when the economic crisis across the country is worsening, it is vital to extend all possible relaxations to the banking sector. The banking regulator must revisit the prudential norms on the non-performing assets to save the lenders from the possible surge in the bad loans and to prevent the borrowers from becoming loan defaulters.

The prevailing abnormal economic circumstances warrant relaxation in the definition of NPA and accordingly extend the default period of the loan to not less than 270 days. Similarly, it is unwarranted to continue the classification of the Special Mention Accounts until the economy resumes normalcy.

The almost dormant economic activities are adversely affecting the cash generation of the business entities and thus deteriorating the debt and interest servicing capacities of the borrowers. The heightening default rate of the loans will lead to a rise in the level of NPA. Any rise in the NPA is a drag on the profitability, capital and on the lending capacity of the lenders, besides necessitates capital infusion.

Any of the credit facilities being utilised by the borrower turning bad is harmful to the borrower also, as it will deprive the borrowers not only to continue with the existing facilities but deprive them of availing new credit facilities from the banking system. Keeping in view of the current untameable financial crisis being faced by India Inc and other entrepreneurs, it is paramount to relax the prudential norms of the income recognition and assets classification normsr.

Kottayam

This refers to ‘Post-Covid, India will have V-shaped recovery: Subbarao’ (www. thehindubusinessline.com ). It was interesting to learn that former RBI Governor Dhvvuri Subbarao, while expressing the view that the prolonged lockdown may push millions into margins of subsistence, expects a V-shaped recovery once the Covid-19 crisis ends. He also ‘forewarned’ that we must remember that even ahead of the Covid crisis two months ago, our growth slowed down but it has completely stopped now (from 5 per cent growth last year to 0-negative growth this year). For sure, all his deep-rooted concerns may not be totally unfounded.

However, the moot question obviously arises here: Which one of the two, ‘life or livelihood’ is more essential for our country as a whole?

Reasonably speaking, such a ‘do or die’ situation may not be able to offer any tailor-made solutions. So let us tread very cautiously by adopting some viable middle path instead of taking recourse to any straitjacketed approach.

New Delhi

This refers to the article “FICCI writes to FSSAI to tell States on safety of chilled products” (April 27). Like many other stigmas associated with the Covid-19 disease, this too seems to be one of them.

A frozen product consumed at peak summer could invite cold and flu. These are times when any normal cough or cold makes our imagination run in the negative direction, as we fear it to be a Covid-19 symptom.

With door-to-door surveillance at its peak, people do not want to take the risk. The added number of tests is added work for State Governments as well. The FSSAI could clarify this along with State Governments and make the information public. This would protect the interest of frozen product manufacturers in the long run.

Chennai

It is important to note that, due to sudden nationwide lockdown, thousands of students are stranded in various parts of the country and abroad, unable to return home due to travel restrictions. Likewise, students belonging to Jammu and Kashmir stuck in several parts of India want to go back. In many cases, they are facing financial distress.

Days after the lockdown was announced, the Uttar Pradesh government sent 250 buses to pick up about 9,000 stranded students from Kota in Rajasthan, Several other States have also either brought back students or are planning to do so. Even the J&K authorities should consider doing this.

Lucknow

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