Letters to the editor dated August 26, 2021

This refers to ‘Borrowers have benefited at the cost of depositors’ (August 26). The cut in the repo rates by 115 basis points from March 2020 till last the monetary policy meeting has adversely affected depositors. The execution of the MPC policy for promoting growth is going against the interest of savers. Senior citizens especially depend on interest earnings from their deposits and hence must not be penalised to compensate the borrowers.

The timely servicing of loans by borrowers is not only critical to enable banks recycle the funds but to realise interest too, which is crucial to paying depositors, meeting overheads and disbursing dividends to investors.

The non-performing assets are pressurising banks to cut interest on deposits. Before passing the downward repo policy rate, the RBI must do a thorough review of the net interest margin of banks. The transfer of bad assets of banks to a Bad Bank or Asset Reconstruction Company will enable them to give better interest rates to depositors.

Changanacherry, Kerala

This refers to ‘Taper is coming, should you worry?’ (August 26). When a comparison between the 2013 taper tantrum and the impact the same could have now, the fact that the world is in the grip of a slowdown due to Covid pandemic was not considered.

This has forced many emerging economies like India to prefer growth over inflation by continuing with the accommodative policy in spite of inflation rearing its head. While one would appreciate the calibrated approach of the Fed in mentally preparing the world to gradually face the reality of monetary tightening, when it happens it will have an impact on emerging economies forcing them to relook the monetary policies which hitherto hinged mainly on domestic factors.

Tapering tantrum will lead to a spike in bond rates and will have an impact on FPI inflows and curtail arbitrage opportunities. Nevertheless, it would insulate India from any major impact this time due to robust foreign exchange reserves which will take care of exchange rate volatility and the intrinsic strength the country enjoys in the form of institutional investors stepping up their investments in the domestic stock market. The downside to the Fed’s approach could be forcing the RBI to relook its ‘accommodative’ monetary policy stance. Fiscal policies will have to play a more dominant role post the development.

Chennai

Apropos ‘Family pension for bank staff hiked to 30%’ (August 26), it is a welcome decision by the Finance Minister. It is a fact that retirees do not get any medical insurance cover after 70 or 75 years of age, and even for retirees below 70 years, payment of insurance means foregoing two months’ pension, which is really unfair.

After all, they also deserve attention as the pension of employees in RBI, Nabard and the Central Government are revised periodically. Also, it is unfortunate that even after the Finance Minister’s assurance around a year back that bank retirees will be looked after, nothing concrete has been done except holding a couple of meetings. Statistics reveal that a minimum of 5 per cent of bank retirees/pensioners expire every year largely due to health factors.

The government must help these senior citizens, especially in the present pandemic situation.

Hyderabad

‘Deadly LSD outbreak spreads to cattle in 5 Gujarat districts’ (August 26) is not a warning to Gujarat alone, but to 12 other States where, too, it has been reported. As it is, farmers are facing several undetected health issues with their bovine population, and the recent one was first reported in Odisha way back in 2019.

Since dairy is the lifeline of most farmers, they may not be in a position to pay much attention to cattle diseases unless enlightened by authorities, whose neglect ultimately affects human health. Animal husbandry departments must build up infrastructure and hasten vaccination before the disease becomes uncontrollable.

Halekere Village, Karnataka

COMMENT NOW