Welcome move

Apropos ‘Go the extra mile to ensure funds to reach MSMEs, FM tells bank chiefs’. In India, there is a great need to ensure development of the MSME sector. The chief advantages of this are increasing job opportunities, production of a number of products required in several fields, no need for investing huge amounts, location in various parts especially rural areas, very quick set-up of units and no need for advanced technologies etc.

Advancing of heavy funds by the banking sector with avoidance of many connected procedures and quick provision of finance by banks are such important issues.

TR Anandan

Coimbatore

Petty politics

This refers to ‘Amit Shah sounds the poll bugle in Bengal’. The best strategy is to be offensive rather than defensive, which the Home Minister is earnestly following. However, the common man, who is floundering between lives and livelihoods, has no propensity to participate in the politicking, and therefore these virtual rallies shall cut no ice with the masses. People are realising that governments are passing the buck and throwing up their hands in despair. The BJP’s provoking and needling Opposition is a diversionary tactic from its gross failures. It is time for all parties to work in concerted manner and serve the cause of survival of humanity. Leave it to voters to appraise the performance of parties.

Deepak Singhal

Chennai

Don’t add to banks’ woes

This refers to ‘Loan waivers are a double-edged sword’ (June 10). Indeed, the decision we take now will have consequences in the near-to-medium term, and considering the health of our economy, every step and policy decision day will have to be thought through. The RBI came up with the loan moratorium to provide much-needed relief, and is also right defending the decision to charge interest during this period.

Even before Covid, lenders were grappling with NPAs, and lacked the willingness to grant fresh credit despite there being no dearth of capital cushion at their disposal. And now, if the Supreme court decides against them, banks will be further in big soup. The RBI has done more than enough to support borrowers in the last 6-8 months. Banks are not only servicing depositors interests but they have their fixed monthly obligations in terms of salaries etc. This should be taken into consideration as well.

Bal Govind

Noida

Interest waiver

This is with reference to ‘Loan waivers are double-edged swords’ (June 10). In the banking business, which is run mostly by deposits of customers, there are certain ethics to be followed. The waiver of loans and interest will affect depositors’ faith in the banks. While the waiver of loans under government schemes is acceptable, a waiver of interest during special moratorium creates bad precedence.

The government has only permitted project extention for housing projects under RERA, and not waiver of either instalments or delivery of flats.

In difficult circumstances, deferral of interest commitments or concessions can be permitted, but an absolute waiver will affect the viability of banks.

M Raghuraman

Mumbai

Economic policies

Apropos ‘How to design a good policy mix in a crisis’ (June 10). It is vividly brought to fore that at this juncture of the pandemic, a combination of profligate fiscal policy and ultra-loose monetary policy will not help. Hence, there is dire need to frame the right mixture of both the fiscal and monetary policy. Currently in India, monetary policy takes the lead with liquidity infusion to ease credit flow and gradual lifting of the lockdown.

The need of the hour is to continue the low interest rate regime and to have calibrated fiscal stimulus based on the pandemic need.

NR Nagarajan

Sivakasi

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