Letters to the editor dated December 7, 2020

Apropos the editorial ‘Banking on digital’ (December 7), many banks have frequent outages resulting in slow networks.

In HDFC Bank’s case, there was a power outage at the data centre, which cannot be an acceptable reason for the failure. The bank must have an alternative power supply and seamless power supply through additional standby power systems.

SBI’s outage was due to unexpected system load. The bank needs to enhance the system's transaction processing capacity, by taking the present peak level of transaction volume, as the base.

Instead of bundling both Inquiry and Transaction modules in the YONO application, it is better to split them into two separate modules.

Chennai

The RBI restraining banks from biting more than they can chew without proper digital apparatus and mechanism in place is necessary but not sufficient . The central bank not only needs to ensure integrity of the digital banking ecosystem but also accountability of the banks towards their customers. Banks must display the contact details of the officials who may be contacted in case of deficiency of services. By all accounts professionalism and transparency in banks leave much to be desired.

Noida

The RBI’s action against a private bank for its deficiency in online banking services is appropriate. Due to their inherent advantages, such as time saving for customers and banks, besides reducing cash and cheque dealings, such transactions may only increase in volume, going forward.

However, for the said transactions to be hassle free, banks need to improve their infrastructure and connectivity.

Customers have no say when banks increase their service charges, or reduce the number of free ATM transactions.

While they can accept occasional delays, the same should not become a regular feature disrupting financial transactions. After bemoaning the heavy footfalls in their branches, banks cannot resent the expenditure involved in scaling up their technology and infrastructure to meet the growing digital transactions.

Chennai

The ongoing protest of farmers against three contentious farm laws has shown no signs of relenting with the government willing only to bring amendments and not repeal the laws as vdemanded by farmers. The unseemly haste with which the government rammed through these farm laws in Parliament without deliberations had sown seeds of mistrust in the minds of farmers. There is a dire need for farm reforms especially on removing stockholding limits of farm produce, curbs on intra-State and inter-State movement of farm produce and the freedom for farmers to find new markets for their produce. But, these reforms cannot be rushed through and it is incumbent upon the democratically elected government to listen to farmers and acknowledge them as an important part of the decision making process.

Sholavandan (TN)

With reference to the article ‘The festering issue of weak PSBs’, banks suffer from ever-increasing NPAs and shortage of capital despite infusion from the government. Though the government so far infused capital of ₹1.2-lakh crore between 2011 and 2017 while the recapitalisation of ₹2.6-lakh crores between 2018 and 2020, much of it is utilised to absorb the losses arising out of bad loans. The gross NPA has raised from 4 per cent in 2014 to 12-13 per cent in the FY 2020.

Despite the RBI and government efforts, the NPA problem could not be solved. Now the government also is not in a position to infuse further capital due to the financial constraints imposed by Covid.

Given the low value of PSB stocks can they raise funds from the market? To tackle the bad loans problem, formation of a bad bank maintained by the government or the RBI is a dire necessity.

Other reforms also must be undertaken in a time-bound manner, otherwise the festering issue of undercapitalised PSBs could cost the economy dearly.

Bhimavaram (AP)

LETTERS TO THE EDITOR Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.