This refers to ‘Banks should win back depositors’ (August 18). The biggest dampener of bank deposit growth has been the low interest rate regime which has lagged far behind inflation rates, steadily eating into the real value of depositor's money.

Rising cost of living has forced even senior citizens to move away from banks to other riskier avenues. While the policy makers sensitively respond to the powerful lobby of borrowers in the name of growth, depositors have been left in the lurch.

Unless rates offered by banks on deposits keep pace with inflation, other steps suggested, though needed, will have only marginal impact.

Manohar Alembath

Kannur (Kerala)

Retaining depositors

This refers to ‘Banks should win back depositors’ (August 18). Banks must keep expanding their deposit books to avoid borrowing from Reserve Bank. The expansion of digital payments are facilitating banks to derive benefits from the floating funds. The waning branch banking is distancing the valued depositors from the branch staff, impacting retention of the depositors and mobilisation of funds.

The financial inclusion programmes not only bring the financially excluded and marginalised sections into the banking sector’s fold, they are vital for economic growth and banks’ profitability.

Responsive attitude, timely resolution of the customer grievance, and reasonably priced deposit products are key to growth of deposits.

VSK Pillai


Retrograde step

It will be a regressive step on RBI’s part to levy charges on Unified Payments Interface (UPI)-based funds transfer transactions. This method of digital payments was hugely useful for retail transactions during the lockdown period.

People were hesitant to handle cash and the UPI system came in handy for everyday transactions for its ease of contactless payments. There was not much of a need to carry wads of currency ,which used to be the norm during pre-pandemic period.

Though many in the rural parts of the country continued to prefer cash, the use of cash in the system came down significantly, which must have been a boon for the RBI.

If one were to pay a charge for use of payments under UPI, this may force many people to revert to cash, which will run counter to the government’s objective to boost digitisation.

MP Muralidharan


Taiwan’s ‘chip’ rise 

This refers to ‘Why Taiwan will remain chip king’, (August 18). Taiwan Semiconductor Manufacturing Company is the world’s largest contract manufacturer of the semiconductor chips.

Its clients include Apple, Intel, Qualcomm, AMD and Nvidia. This $550-billion firm today controls more than half the global market for made-to-order chips and has an even tighter stranglehold on the most advanced processors. Taiwan could attain top position in the world in semiconductor manufacturing efficiency, supply chain integrity and innovation energy because of its 50 years of continuous innovation, investment and abundant talent.

TSMC’s success in cornering this vital market has become a geostrategic migraine. While Taiwan’s chip industry emerges as a battlefront in US-China showdown, the Pentagon is pressing the Biden administration to invest more in advanced chipmaking. However, no other country in the world can beat Taiwan in a foreseeable future — as chip making is a complex process that requires precision, clean environment, expensive factory equipment and time.

N Sadhasiva Reddy