Letters to the editor dated September 8, 2021

| Updated on September 09, 2021

Retain NBFC model

This has reference to ‘NBFC regulation needs to be strengthened’ (September 8). If NBFCs are to be regulated like banks, a level-playing field has to be created between them.

Acceptance of demand deposits and DICGC cover for NBFC deposits should be allowed and this implies stipulation of CRR/SLR also. Once these are implemented, there will hardly be any difference between regular banks, Small Finance Banks and NBFCs; all of them will have a similar business model.

NBFCs have been doing business and helping customers in areas where banks do not go and their expertise in SME lending, loans against property and promoter funding against shares have helped industries in times of stress. They have been leaders in vehicle/truck loans and gold loans and these strengths should not be disturbed by bringing NBFC regulations on a par with banks. Controls are necessary but NBFCs and banks should coexist rather by leveraging on their core strengths.

M Raghuraman


Tighten supervision

The failure of IL&FS and DHFL have given enough lessons for the regulator to tighten the functioning of NBFCs. The recent failures of DHFL and IL&FS came as a shock to both individual depositors and the regulator.

A few points to tighten the supervision on NBFC could be: First, the supervisory mechanism must focus on rollover of defaulted loan assets going round multiple times in the loan book of NBFCs. Second, it should be mandatory for NBFCs to disclose related-party transctions on a half-yearly basis.

Third, towards improving the asset quality and recovery mechanism, the regulator must think of making the ‘past due’ concept and the NPA norms for asset portfolios of public sector banks applicable to NBFCs also.

RV Baskaran


Taliban government

More than the shambolic withdrawal of US forces and the concomitant faster ascendancy of the Taliban in Afghanistan, what baffled many was the inordinate delay in government formation giving rise to speculation about the internal divisions within the Taliban.

Ending weeks of suspense, the Taliban had finally appointed Mullah Hasan Akhund as the interim prime minister.

While Akhund had served as a foreign minister when Taliban formed the government in Afghanistan in 1990, he is mostly seen as a influential religious figure who played a key role in the development of Taliban's religious identity. As a conservative, it remains to be seen whether Akhund will allow women in Afghanistan to study and work.

M Jeyaram

Sholavandan, TN

Talent hunting

This refers to ‘IT firms hiring as marketers’ (September 8). The advent of digital technology, of which AI is just one example, opens more accurate and speedy avenues of using data for locating and approaching talent effectively.

While a data driven marketing approach works well in identifying potential employees, human assessment plays a decisive role in selecting the best among them. In job interviews the judgment capacities of the selectors enable them to identify the vital few from among the many aspirants.

YG Chouksey


Chip manufacturing

This refers to the edit ‘Broken chips’ (September 8). For want of a nail, the battle was lost, says an old English poem. Taken in the present context, it may be safely said that for want of a chip, the entire automobile industry has come to a standstill. The Indian economy would be in much better health had we become a little more atmanirbhar in the manufacturing of chips.

As pointed out, the long gestation period and rapid technological advances make investments in chip manufacture a little dicey. That is why it is shunned by many private investors. Somehow, the over-dependence on China Korea and Taiwan must end. If we can set up our own production in India, it would mark a big move forward in the attempt to become a super power.

Anthony Henriques


Published on September 08, 2021

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