Take the RRB route Honest assessment
With reference to Joydeep Ghosh’s report, “Capital infusion is not a solution but is unavoidable: Usha Thorat” (October 27), bank nationalisation was one of the steps taken for financial inclusion. It failed, as banks granted huge loans to influential entities, institutions and sectors through faulty appraisal and poor follow-up. Such loans are nothing but bank finance to rudimentary nonperforming assets (NPA). Other reasons are improper identification of big borrowers, faulty formulation of projects, unscientific appraisal methods, influential sanctions, poor or no follow-up and no evaluation resulting in high NPAs.
At this juncture banks finance twice, first before an account becomes an NPA and second, after becoming NPA through provisions. The Basel-III requirement of capital adequacy is directly proportional to the quantum of bad loans. They hamper the net worth of a bank. As several banks are government-owned, they request the government for capital infusion. This is vicious cycle and should not be repeated every five or 10 years. Rather, take the regional rural banks (RRB) route. After capital infusion, the number of RRBs dropped from 196 to 56, so that the surviving ones are viable and vibrant.
After all, banks and the government use public money. As rightly said by Thorat, former deputy governor of the Reserve Bank of India: “Capital infusion is not a solution. There is a strong need to reduce the number of banks to sevennine in a phased manner, accompanied by financial discipline at both levels - lender and borrower.”
Avinash Thite Lucknow acute infrastructure shortage.
More passengers mean there should be more flights. But it is difficult for any airline to get even a single additional slot during peak hours. Airlines are being asked to use the red-eye zone, that is, scheduling flights before 5 am, but this would only discomfit passengers.
Domestic airports are bursting at the seams. Twenty-five of the 126 airports run by the Airports Authority of India have reached saturation points in terms of their runways and terminals. Not only can more flights not land, but that there is also no space for passengers to stand comfortably at some airports during peak hours.
Domestic air traffic rose 23 per cent in 2016 and hit the 100 million passenger mark. Five hundred new aircraft have been ordered; 50 are to be added every year to the current fleet of 300. How long can these airports be sustainable?
While growth in the number of passengers is a sign of the economy becoming stronger, the government should ensure that lack of infrastructure does not become a hindrance.
Shiva Kumar Mumbai With reference to the report, “BJP to celebrate demonetisation anniversary as anti-black money day: FM” (October 26), it is interesting that November 8 will be observed in two diametrically opposite ways — as anti-black money day by the ruling Bharatiya Janata Party (BJP) and as a black day by Opposition parties protesting the note ban decision of a year ago.
I wish the BJP government issues a white paper containing the list of politicians possessing black money. There should be an honest assessment of the party-wise accumulation of black money. But will that ever happen in India?
S Kumar New Delhi