Letters

Letters to the editor dated November 1, 2021

| Updated on November 01, 2021

Currency still in demand

This has reference to ‘Taking a closer look at money supply’ (November 1). Money supply has been constantly on the increase over the years, even so during periods when inflation was under control.

There has been a substantial increase in currency in circulation, a major component of money, even after demonetisation.

In the period between 2015-16 and 2020-21, the increase in currency level was over 70 per cent and this has now surpassed pre- demonetisation levels.

This is the outcome of increasing money supply and this aspect needs review and control. Despite the increase in online payments, people are still holding more funds in cash mostly in 500 rupee notes, as a cushion against uncertainty that may arise out of Covid which has an effect on M3.

Though household savings is the major strength of the Indian economy, piling up of currency and liquid money without any productive use will pave way for black money and increase in retail inflation. Further, this will abnormally impact equity and bond markets.

The RBI and the government should advise people against panic piling of cash as there are currency chests all over the country. It is also time digital currency is introduced as a complement to paper currency.

M Raghuraman

Mumbai

Climate change

This refers to ‘Success of COP26 will hinge on climate finance’ (November 1). There is a lot riding on the UN Climate Change conference being held in Glasgow.

What the leaders of 200 countries decide will have a direct bearing on the fate of the global environment. Nature keeps giving us alarming signals time and again in all parts of the world, and we cannot afford to take them lightly.

To convert words into action, both developed and developing countries will have to act in tandem to sort out climate finance challenges, and most critically developed countries must provide the required assistance to developing countries in this crucial task.

Bal Govind

Noida

Addressing NPAs

Apropos ‘To ease lending, FinMin moves to boost bankers’ morale, growth’ (November 1), there’s no denying that the issues arising from the unprecedented growth in stressed assets in public sector banks during the last decade are huge.

They cannot be addressed only by setting up a National Assets Reconstruction Company.

The trust deficit issue arising from mismanagement of depositors’ money with banks need to be addressed without further delay.

As the problem is not just confined to PSBs or the banking system, the government, in consultation with RBI, may have to evolve transparent and enforceable guidelines applicable to all institutions and organisations mobilising deposits from the public for carrying out business.

MG Warrier

Mumbai

Protecting retired bankers

The decision of the Finance Ministry to relax a few important guidelines such as fixing accountability on bank officers under ‘mala fide intentions’ clause within a period of six months from the date of classification of the loan account as NPA is welcome and needed in the current circumstances.

While the intention of the government may be to improve the credit outgo of the banking industry, the decision is also likely to soothe the nerves of retired officials who acted in the interests of the bank while granting loans, which however turned non-performing subsequently. Many such cases are pending against them in different platforms.

It will be really unfortunate if bank officials who have not committed any fraud but only acted in promoting banking business in rural unbanked areas, especially when there was no total computerisation in bank branches during those times, are brought to task.

In the absence of any history of fraud in the careers, it is the duty of the government, as stated in the recent guidelines too, to protect such officials post-retirement.

Katuru Durga Prasad Rao

Hyderabad

Published on November 01, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like