Letters

Letters to the editor dated March 26, 2021

| Updated on March 26, 2021

'Let's wait and watch'

This refers to the report ‘BJP submits to Governor list of 100 lapses by Maharashtra govt’ (March 26). Despite a delegation of senior BJP leaders in Maharashtra led by former Chief Minister Devendra Fadnavis submitting a memorandum listing 100 lapses of the Thackeray government to the Governor, urging him to send a report to the President on the current situation in Maharashtra, it goes without saying that things won't really move unless he (the Governor) gets a ‘green' signal from the Union Home Ministry.

Maharashtra is in the grip of a political turmoil after former Mumbai Police Commissioner Parambir Singh wrote to the Chief Minister Uddhav Thackeray, alleging that State Home Minister Anil Deshmukh had indulged in corruption and had asked suspended Assistant Police Inspector Sachin Waze to collect ₹100 crore every month.

With Singh now moving the Mumbai High Court, per the Supreme Court’s direction, we will have to wait for its orders given Thackeray’s silence on the issue.

SK Gupta

New Delhi

Inadequate structure

Apropos to the article “Is Ease of Doing Business ranking over-rated?” (March 26), it appears that exclusion and weightage of certain evaluating parameters for ease of doing business are not properly represented in the format.

Thus reputation and personal image of ruling leaders, attitude and policy of the government towards private sector and a business friendly political and social climate are critical for investment. In India land acquisition is hampered more by government attitude than procedural bottlenecks.

Secondly, labour and other reforms have improved the country’s ranking but core issues like infrastructure still remain.

YG Chouksey

Pune

Banks wobbly

With reference to the article ‘Banking sector wobbly even after reforms’(March 26), the revival of the Covid-devastated economy is crucially dependent on banking sector reforms to unshackle banks from the bad loans burden and help them focus on lending. Income Recognition and Asset Classification norms as applicable to banks sans recognising the trends and volatilities prevailing in the economy from time to time is far from reality and leads to the generation of stressed assets. In order to make the IRAC norms more pragmatic, after taking into consideration the problems and peculiarities of each sector of the economy, the definition in vogue for recognising the class of the assets needs to be modified to avoid the creation of bad assets.

The public sector and old generation private sector banks, despite having a major share in the banking space, are still not tech-savvy, compared to the new generation banks.A well trained and skill updated workforce is essential to ensure better customer service. The merged public sector banks are still grappling with problems relating to the merger, hitting the interests of the customers. The government's proposal to establish Bad Bank and Developmental Financial Institutions will enable banks to sustain the capacity to lend, besides, avoid asset-liability mismatches and the generation of bad assets and their repercussions.

VSK Pillai

Changanacherry

One reason for the turbulence in the banking sector is the legacy NPAs, falling margins and management weaknesses. The Public Sector Banks (PSB) are not autonomous and have to depend on the government or the Indian Banks’ Association for taking decisions. PSBs compete with each other and this results in private players having an edge over them. The number of PSBs needs to be reduced so that economies of scale and competitiveness can be improved. The private sector banks and small finance banks need to maintain the growth pace by constant innovations and expansions.

The RBI has already initiated steps for aligning NBFCs with banks and they should gradually be upgraded into banks as they do not have access to low cost deposits. The immediate reforms that is required in banking is towards improving employee efficiency and more use of digital facilities to reduce interface. Banks need to stabilise their balance sheets and upgrade technology and infrastructure and need robust financial back up. Given this background the RBI is perhaps right in not reducing the CRR and SLR.

M Raghuraman

Mumbai

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.

Published on March 26, 2021

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