Letters to the editor dated October 9, 2020

The passing away of Ram Vilas Paswan is indeed a great loss not only for the BJP but the entire nation. Paswan had a successful stint with the current dispensation, thus dispelling the notion that Dalits may not fit into right-wing politics. He struggled relentlessly to champion the cause of Dalits.

His untiring efforts resulted in the passing of an important legislation — the SC/ST Atrocities Act. This law has truly redefined and asserted the fundamental rights of these oppressed people. May his soul rest in peace and may more such leaders emerge.

Hyderabad

This is with reference to ‘Bad bank, good idea?’ (October 9).

The establishment of a bad bank is not a bad idea, especially in these pandemic times, as the percentage of non-performing assets has been rising. Once it is established, banks would be in a hurry to transfer all their bad debts to it without making much efforts at recovery.

That is why there should be some strict guidelines to be followed before absorbing a bad loan into the bad bank.

The follow-up of loans from the disbursement stage must be noted. Banking experts must be appointed in the bad bank as directors, and only if the board is satisfied about the efforts taken for recovery should the bad loan may be permitted to be absorbed.

The question of when the lender itself is unable to recover how would a bad bank be able to does not arise as it is common knowledge how busy banks are these day and what is the time available to them to concentrate on recoveries.

Bhimavaram, AP

A certain percentage of loans is likely to turn bad even in best of the economic conditions and, at present, we have legacy cases besides the expected influx of NPAs due to Covid-19. An exclusive banking entity to handle such cases is essential as the management of stressed assets need focus and expertise. The idea of bad bank cannot be construed as an escape route for banks who sanction the loans. The formula for the valuation of such assets sold to the bad bank may provide for the loss of banks who originate the assets and no one can go scot-free if the intentions are mala fide .

The major difference between asset reconstruction companies and bad bank is that the latter can provide succour to the borrowers in the form of working capital and try revival also while ARCs have mandate for NPA management only. Bad bank as a concept is welcome for an economy like India and this will help banks to focus more on quality portfolio

Mumbai

Apropos ‘States can reap benefits of farm reforms’ (October 9), there is no gainsaying the fact that these reforms were long overdue. By removing the ‘ mandi clips’, farmers are bound to benefit as they now have the freedom to sell their produce in any market where the prices are lucrative.

Mandis under the ambit of APMCs charge farmers high service rates. But the new laws, coupled with the continuation of MSP, give farmers more options. The quick passing of the laws without taking farmers into confidence is the main reason for the government facing criticism on this front.

Sivakasi

Only time will tell whether the new farm laws can be compared with the 1991 economic reform. Yes, the government has taken one more step than what was promised by Congress in its manifesto.

The best part of this reform is that farmers will have access to both private buyers as well as government mandis to sell their produce. Ultimately, it is the middlemen who will be eliminated. States should reconcile themselves with this reform as it will be beneficial in the long run.

Noida

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