Letters to the editor dated August 10, 2020

This refers to the editorial ‘Risky move’ (August 10). The RBI should have avoided increasing the gold loan-to-value limit from 75 per cent to 90 per cent because when gold prices drop, it will pose a huge threat to lenders’ portfolio as there will be a mismatch between their loan outstanding and the underlying collateral value. It will not only lead to unnecessary issues between borrowers and lenders, but may increase the latter’s NPAs as well.

Noida

This refers to ‘Defence Ministry to impose import embargo on 101 items’ (August 10). While greenlighting this initiative, there are few issues that must be addressed. First, the technology of the indigenous equipment must match or be better than those already in use. Second, to ensure quality, adequate skilled manpower is required and high priority must be given to R&D. And, third, there must be a long-term plan to increase export of the indigenous defence equipment.

New Delhi

Apropos ‘How business can grow amidst Covid’ (August 10): The pandemic has thrown the economy out of gear, and it will take a long time to revive. This is, however, the right time for the government to complete unfinished projects and speed up infrastructure work so that people get employment. Marketing of food products, medicines and other essential services should be given a boost. The pandemic has also shown that cleanliness and hygiene are of utmost importance. The government should make its Swachh Bharat Mission more effective so that cleanliness-related jobs such as that of sweepers, manufacturing of hygiene and cleanliness products, etc., get a fillip.

Thane

This is with regard to the one-time restructuring of loans proposed by the RBI. The success of this plan depends on its simplicity and timely implementation. Though the objective of the scheme is right, there are some areas which merit reconsideration. The cut-off date proposed is March 1, 2020, but the adverse effects of the lockdown would have hit many businesses only after this date and resulted in loan overdues subsequently.

Further, the latest implementation date for the Resolution Plan is June 30, 2021, which leaves a gap of almost a year from now by which time many businesses would have faced severe financial constraints and landed in more difficulties. The stipulation for obtaining credit-evaluation from a rating agency for the resolution plan is superfluous and will be time consuming. Further, the restructuring norms may be different for borrowers suffering temporarily from cash-flow problems and those having sectoral issue. The former may be given quick relief to make the restructuring more effective.

Mumbai

Apropos ‘Contempt of court fireworks’ (August 10), there has been an increase in the criticism of the Supreme Court because quite a few of its verdicts have gone against the pleas of eminent lawyers. In the present case, Prashant Bhushan mocked and questioned the CJI astride an expensive, but stationary, motorbike in the Raj Bhavan (and not on the road) without wearing a helmet. This comment was not “about matters of public interest”, a condition required by Lord Deming to justify criticism of judges.

Pune

The hunt for a successor to Aditya Puri at HDFC Bank was on for quite some time. Sashidhar Jagdishan, a veteran and versatile banker, is now all set to succeed him and head this premier bank. Jagdishan comes with a wide range of experience in various disciplines. “The best is yet to come” was the gentlemanly way in which Puri welcomed the appointment of his successor designate. This is professionalism and dynamism at their very best.

Nagpur

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