Letters

Letters to the editor dated November 3, 2021

| Updated on November 03, 2021

Penalising bankers

This has reference to the news on the arrest of former SBI Chairman Pradip Chaudhari in connection with a loan scam. Many prominent bankers have criticised the move saying it was hasty and a proper criminal justice system should be put in place to protect bona fide action of bankers.

No banker should be penalised if lending decisions are taken in the normal course since business risks are part of the lending process.

As per a report shared by the government in Parliament, since 2015, 38 wilful defaulters have fled India during the last five years which include Vijay Mallya, Nirav Modi and Mehul Choksi.

Certainly all these instances could not be construed as ‘deserving cases’ for lending, and hence cannot be treated as bona fide decisions which call for action against the top echelon of bankers.Banks should realise that when there is a crunch, the capital which government infuses is taxpayers’ money.

This calls for utmost care on the part of banks when it comes to deployment of funds for the purpose of lending.

Srinivasan Velamur

Chennai

Stressed assets

This refers to ‘RBI panel favours sale of stressed assets by lenders at early stage’ (November 3). Sale of financial assets to ARCs/banks/NBFCs/FIs is considered when realisation of security is difficult and time consuming, no compromise offer is perceived in the near term, high administrative, legal, security and opportunity costs associated with continuing the financial assets, no acceptable resolution option in sight, etc.

Lenders are assigning to the ARCs the right to recover the lent amount with interest; not that the collateral security is sold to ARC, as was widely publicised in Pradip Chaudhuri’s case. When the dodgers escape and innocents get jail, it is to be seen how the RBI panel recommendations would take shape practically.

PD Sankaranarayanan

Kumaramputhur PO, Kerala

At the receiving end

Public sector banks (PSBs) have always ensured smooth implementation of all successive governments’ ambitious schemes — be it poverty alleviation, job creation, Mudra, Jan Dhan or DBT. At the same time, they are the ones who are generally blamed for the poor recovery mechanism and NPAs. However, when a leading PSB takes hard NPA recovery measures, with the decision of several officers and committees, the then chairman, after more than a decade, is arrested.

Shouldn’t the judiciary and police authorities give prior notice before such arrests, simultaneously taking the Finance Ministry also into confidence?

BN Bharath

Bengaluru

Climate targets

Apropos the editorial ‘The Glasgow promise’ (November 3), Prime Minister Modi was emphatic in announcing India’s approach to the climate problem in achieving net-zero emissions by 2070. Though this goal appears to be far out into the future, it is grounded in the reality of climate justice.

Modi has put the onus on advanced economies, especially the US, to cut down the emissions in a structured way.

On the domestic front, India has taken several strides in meeting energy requirements from renewable sources like solar and wind energy. The current target of achieving 100 GW of installed capacity of solar power by 2022, though optimistic, is achievable.

RV Baskaran

Chennai

Loan recovery

This refers to ‘Household debt fears are exaggerated’ (November 3). The harsh loan recovery methods adopted by many micro-financial institutions need to be abolished to encourage households to borrow.

The reluctance to provide loans to vulnerable households will push them to borrow at excessive rates from local moneylenders. The government and the banking regulator must review the policies relating to microcredit, re-examine the loan recovery system in financial institutions, and help improve the standard of living of susceptible sections of society.

VSK Pillai

Changanacherry, Kerala

Published on November 03, 2021

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