Letters to the editor dated August 17, 2020

| Updated on August 17, 2020

Diminished trust

This refers to ‘MSMEs tripped by trade credit collapse’ (August 17). The main external sources of funding for the business operations of MSMEs are financial institutions, informal money-lenders and material suppliers. The permissible quantum of funds from financial institutions, especially from the banking sector, is subject to the cash inflows of the units from other sources. Despite the government’s credit-oriented packages to accelerate the flow of formal credit to MSME units, vulnerable micro and small units still turn to the local money-lenders and or small NBFCs for their credit needs. The lack of trust towards small units shown by the market constrains them from using the credit to buy materials.

Honouring commitments in respect of servicing the debts and meeting contract obligations are critical in building trust in the market. The deteriorating repayment and compliance cultures adversely affect the growth of trust in the system. The timely realisation of receivables enables the seller to liquidate his liabilities towards the creditors and thus smoothen the rotation of the working capital.

There must be a mechanism to incentivise sellers to sell goods and services to MSMEs, more particularly to those micro and small units who are unable to raise credit purchases. At a time when the economy is seeing chaos, it is essential to further strengthen the support to MSMEs to accelerate economic activities and speed up the growth of jobs and exports of goods and services.

VSK Pillai


Reputation risk management

This has reference to ‘Independent directors and brand reputation’ (August 17). The brand reputation of a company is independent of its directors and is built because of quality of its products and services, ethical practices and adherence to laws of the land. The independent director cannot build the reputation of the company on his own, but his presence in the board can add to the organisation’s credibility.

Corporate groups, growing companies and those dealing in finance must approach corporate reputation management as a regular function. This involves weeding out unscrupulous characters in the company, internal control, avoiding litigation, controlling frauds and treating reputation risk as part of risk management. Companies having a strong whistle-blower policy will be able to manage reputation risk well, as warning signals will be highlighted in the complaints. For independent directors, this is a useful tool as they will get a feel of internal problems through such complaints easily.

M Raghuraman


Dhoni’s ad career

Apropos ‘Retired, but Brand Dhoni still on a strong advertising pitch’ (August 17). No other cricketer in the sport’s history can boast of three ICC trophies and top global Test rankings, such was the aura of MS Dhoni’s achievements that made him a great captain. He could have extended his shorter-format international career had it not been for Covid-19. Dhoni’s journey from a small-town boy to one of the most astute team leaders the world has seen is no short of a fairytale.

Even though he has retired from international cricket, and will only be present during the IPL season, his brand will continue to have a strong recall value. Since calmness and reliability define Dhoni, all those brands which associate with him and these values will still bear fruit.

Bal Govind


Right to criticise

The All India Lawyers’ Union’s concern over the Supreme Court holding senior advocate Prashanth Bhushan in contempt is genuine. It will create a bad precedent, hampering the Constitutional right of free speech. In a democratic country like India, nothing or nobody is exempt from fair criticism. The judiciary commands respect but never demands it. Respect and dignity can not be demanded from citizens on the threat of contempt.

The best way to sustain dignity and respect for the office of the judge is to continue striving to deserve it from the public.


Bhimavaram, Andhra Pradesh

Published on August 17, 2020

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