Impact of Sri Lankan crisis

The current economic crisis faced by Sri Lanka is the cumulative effect of the mismanagement of the finances of the country by successive governments leading to a situation where debts far exceed the forex reserves. This has curtailed the ability of the nation to import petrol, diesel, food items, essential medicines, etc. The prices of essential items have gone up many fold, but even at such high prices the items are not available, leading to chaotic conditions. There are long hours of power outage and a political crisis is looming large. The current account deficit has crippled all activities forcing even the central bank governor to resign.

The Sri Lankan crisis is likely to have monetary impact on India as support in terms of aid, loans and goods will have to be extended. Influx of refugees is likely and they have to be accommodated on humanitarian grounds. Besides, this may encourage people of banned outfits to enter the country along with other civilians and more expenditure will be required for Defence.

M Raghuraman


Fuel price hike

This refers to ‘Fuel price revision: Petrol, diesel up around 80 paise a litre’ (April 5). The government of the day seems to be testing the ‘patience’ of the hapless end-users of of twin auto fuels. What else could explain the five state-owned oil marketing companies (OMCs) continuing with their price revision by raising retail selling price of petrol and diesel by 74-85 paise a litre on Tuesday, representing the 13th hike since March 22. The price rise is being attributed to the ongoing Russia-Ukraine conflict.

Since Russia has already started meeting India’s overall crude oil requirements and that too at some discounted price, where is the case for the government to talk economics. Why take the common man for a ride and make deeper holes in their pockets?

SK Gupta

New Delhi

A beneficial merger

This refers to ‘Birth of a goliath’ (April 5). The post-merger image of HDFC Bank is something many have been dreaming about in the Indian banking sector. Such a changeover was overdue. If banks can provide specialised services where necessary, there will be considerable savings in resources and will help reduce costs. If the HDFC experiment is successful, it may pave the way for stronger banks to grow in size by taking over other entities in the financial sector. Such a change will also ensure ease of regulation and supervision.

MG Warrier


Big banks

Mergers and demergers have become the order of the day. The early 1990s witnessed the saga of subsidiaries. Many banks, including large public sector lenders, were de-linking key areas like housing/retail lending from their branches with a view to focus on improving service at the counters.

To face both domestic and global financial challenges, it would be better to have a handful of big banks and financial institutions.

RV Baskaran


Surprise move

Market watchers were completely taken by surprise at the news of the mergers between HDFC and HDFC Bank. The markets have roared their approval with a nearly 10 per cent rise in share prices. The complete secrecy in which the proposed merger was carried out is a tribute to the professionalism of the HDFC twins. The economies of scale would enable HDFC Bank generate greater profits. Other banks lending in the housing sector will be adversely affected by the merger and will need some out-of-the-box thinking to counter this move.

It would not be surprising if there is a churn in the home loans business.  Hopefully, this move would benefit the consumers as well. What happens to the employees is entirely another matter. Anthony Henriques Mumbai

Covid fund needed

The National Commission for Protection of Child Rights (NCPCR) has summoned ICICI Bank officials to appear before it for sending notices to the children whose parents had taken a home loan from the bank and died due to Covid. The action of the bank in sending notices of acquiring the house in case of non-repayment of the home loan no doubt is a hasty step. For these type of contingencies, the government should come forward and help by creating a Covid fund.



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