Letters to the editor dated August 4, 2021

With reference to the article ‘Preventing the pile up of NPA's’ (August 4), despite the rapid IT strides made by the banking sector, the basic prudential lending system of banks has to depend upon the 3 Cs of the borrower/ borrowing unit, as pointed out by the writers. The misdeeds of lending cannot be erased by advanced technology because ultimately it is the human element that matters most in making a good lending turn a bad one.

Further, lack of adequate monitoring of the unit, its promoters and ensuring the end use of the borrowed funds will all make the borrowers divert the funds into other purposes with fraudulent motives.

The time has come for the bankers to follow all ground rules before sanctioning loans and without compromising on the rules and norms. Also recovery should not be linked to politics.

Hyderabad

With reference to ‘Preventing the pile up of NPAs-II’ (August 4), the series of articles analysed in depth the pressing issues presently facing the NPA conundrum in banks and suggested the much needed corrective steps to be adopted.

Additionally, to save the situation, the routine political strategies like debt write off and providing relief to loan defaulters, divestment of public sector banks and infusing re-capitalised funds to the sick banks must be curbed. To establish more transparency and to safeguard the interests of bank shareholders, apart from improving the governance standards, it must be made mandatory to disclose the list of top 100 defaulters with updated status of recovery and the interests of the directors and key persons in those companies in the annual reports of banks.

Bengaluru

With reference to the article ‘Xi's China takes a left turn’ (August 4), though China is an an economic superpower thanks to capitalism, its campaign now to regulate Big Tech is being derided as totalitarian. Yet the drastic proposals in the US Congress to break up companies such as Google, Facebook and Amazon are branded as democratic. China’s tech companies have long ignored reporting acquisitions and leverage loopholes in oversight on IPOs in particular overseas. The US is dismayed that the tech behemoths pay such low taxes by navigating complex provisions.

One great concern was the emergence of the “era of the apps”. With their immense user base, big tech companies designed costly but clever apps which the merchants or start-ups had little recourse but to use them for reach and distribution.

The merits of the License-control Raj are being re-discovered. Not only China but US and nations around the world are waking up to risks of Big Tech’s dominance through data dominance, neutralising competition, infringing on privacy and the nightmare — the inevitable political influencing.

Navi Mumbai

With reference to the Editorial ‘Leg up for depositors’, what we have witnessed in the PMC and YES Bank fiasco in the last two years, which resulted in huge anxiety and distress for depositors and customers, such changes proposed in Deposit Insurance and Credit Guarantee Corporation (Amendment ) Bill 2021 will address all those concerns.

Apart from the benefits like paying upfront and within 90 days to its depositors, what it will do is to restore some of the trust that was lost in the banking system. The crucial feature of this Bill is that it addresses the deposit insurance fund for all kinds of banks.

It means if in future a bank of any size fails, its depositors need not panic. It is going to create a win-win situation for all stakeholders.

Noida

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