Letters to the editor dated August 3, 2021

This pertains to the article ‘Where reforms didn't deliver’ (August 3). The growth and reforms executed so far have been proved inappropriate in extending adequate social security to the people. Hunger, unemployment, poor literacy and bad health conditions are persisting. With the widening inequalities in income allocation of funds from the exchequer to create jobs is paramount. A review of the tax system to ensure more funds for investment in the healthcare, education, and infrastructure of the rural areas is needed.

The existing job guarantee scheme needs to be revamped to create more job days and to prevent delays in disbursing the wages.

Credit is barely available to the agriculture operations of the marginalised farmers and the micro and small economic activities as well.

Easy availability of cheap credit from financial institutions, RBI’s credit expansion actions and other factors have led to the NPA problem. It Bad loans recovery and resolution need to be accelerated to safeguard the interest of the stakeholders.

Changanacherry (Kerala)

This refers to “Preventing the pile up of NPAs-I” ( August 3). While the article ascribes phenomenal growth in NPAs to ‘3C’s (Character, Capacity and Capital) implying lack of credit appraisal and monitoring techniques between 2008-2013, it is surprising to note that the article has conveniently overlooked political factors like crony capitalism for such a sordid state of affairs.

The fact that frauds and wilful defaults had accounted for more than ₹4 lakh crores between 2008-2013 proves the point.

A ‘free-for-all” approach seems to have been adopted by commercial banks during this period on lending leading to a whopping rise in NPAs.

The fact that infrastructural loan (Power) had accounted for more than 350 per cent growth during 2008-2013 defies logic.

Since infrastructure loans are basically long term in nature, massive disbursement of such loans would have led to asset-liability mismatch. One wonders what role ALCO (Asset-Liability committee) of the concerned banks had played in ensuring adherence to limits as stipulated in RBI guidelines.

Banks must have violated single/group exposure limits leading to such massive violations. This also puts RBIs regulatory and supervisory framework under a cloud.

Chennai

Banks are custodians of public money so it should be used in a prudent manner. Political meddling is one of the main causes for stressed assets in the banking sector. The mounting NPAs of the PSU banks is a threat to the economy and the issue needs to be resolved by the Finance Ministry and the RBI.Loan waivers also put heavy financial constraints on the banking sector.

Most of the loans are waived either with an eye on elections. We need more banks which will lend to poor farmers and small entrepreneurs to reduce their dependence on moneylenders who charge higher interest.

Thane

With reference to rhe report “In green push, JSW Energy to spin off thermal units for sales” (August 2), we wish to clarify that company has received board’s in-principle approval for evaluating options for reorganising the company’s green (renewable) and grey (thermal) businesses. We reiterate that company’s thermal units are not up for sale but we are looking to enhance the value proposition for stakeholders.

LETTERS TO THE EDITOR

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