China’s border ploy

This refers to ‘Why China doesn’t clearly define its borders’ (July 14). China does not do so to serve its own vested interests. Its notoriety has been exposed time and again. With the recent skirmish, which led to the death of 20 of our soldiers, it is time we forced China to define its frontiers unambiguously. Though Ajit Doval and Wang Yi may have agreed to complete the disengagements, until it happens from all fronts we should stay alert and be ready for any eventuality to defend our territorial sovereignty.

Global pressure is one of the critical tools India will have to adopt to put pressure on China, much like what India used to aginst another hostile neighbour Pakistan. PLA moving back a few kilometres could be a symbolic gesture while what we need to address is the bigger picture for the long term peaceful relationship with China. With Nepal also redrawing its map as per its whims and fancies, we must sort this border issue once and for all.

Bal Govind

Noida

Credit appraisal

This refers to ‘Covid impact: Loan-appraisal norms will undergo sea change, say bankers’ (July 14). Apart from the adverse impact of decelerating economic activities since 2018, we are now facing health and economic crises induced by the pandemic. In the current financial year, the economy has taken a big hit due to the rapid spread of the virus.

As this financial year has been abnormal so far, it will be inappropriate to evaluate the performance of business enterprises and, thereby, their credit requirements, based on current financial numbers. The financial statements of the two years preceding fiscal 2019-20 will be more appropriate to understand the financial position and the overall capacity of the enterprises.

Need-based credit creation and its regulated release is key to rebuilding and accelerating economic activities that were affected by the pandemic. The lenders must not provide credit beyond the credit-absorption capacity of the borrowing unit to prevent the credit from becoming unproductive.

Instead of depending more on the rating of the unit by credit rating agencies, the lenders must give more value to its own ratings while assessing the financial viability of the unit.

VSK Pillai

Kottayam

Banks raising capital

This refers to ‘YES Bank FPO: Asset quality overhang to weigh on stock’ (July 14). A number of banks have lined up their capital-raising plans to augment resources. It is no secret that the balance sheets of most of the banks have been impacted due to Covid-19 and related economic downturn resulting in slippage in NPAs.

These banks need money to shore up capital and equity seems to be the cheapest option without any obligation, especially during these uncertain times when the business environment can sour further. Therefore, retail investors should carefully evaluate their risk appetite before subscribing to these FPOs.

Kanak R Nambiar

Kannur, Kerala

Rajasthan politics

Rajasthan has plunged into a major political crisis as a corollary of the power struggle between Ashok Gehlot and Sachin Pilot. Significantly, the rift leading to the crisis did not come about as a result of any ideological or policy differences. Sachin Pilot who was sacked as the PCC chief and Deputy CM following his revolt should have closed ranks in the first place to tackle the unprecedented health crisis.

He was in such a hurry that he was not dissuaded by even the coronavirus pandemic from intensifying the factional fight to gain what he had firmly thought was rightfully his — CM’s chair.

Sachin Pilot thought that the crown was his because of the key role he played in bringing the Congress back to power in Rajasthan. But he did not command the support of the majority of Congress MLAs for being anointed the CM. Given the rough and tumble of politics, a meteoric rise is not always possible; sometimes it takes time and patience to reach new heights.

G David Milton

Maruthancode, TN

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