With RBI not cutting the repo rate during the July review in spite of CPI headline inflation reaching a record low of 1.54 per cent, there is huge expectation of a rate cut in August. Apart from the low inflationary trend, one should take into consideration the precarious financial condition banks are in. The new RBI norms are expected to direct banks to set aside 50 per cent of bad debts taken to the NCLT and 100 per cent if the tribunal orders liquidation. This will put pressure on banks.
Banks must concentrate on treasury operations. Foreign banks may resort to short sale of securities/bonds to reap huge profits expecting a rate cut. Thus a repo rate cut could help banks generate profits through trading and revaluation of SLR securities. Hence a rate cut is imminent.
Srinivasan Velamur
Chennai
The waiver question
This refers to ‘A case of double standards’ by A Srinivas (From the Viewsroom, July 26). Any haircut accepted by banks while settling dues from corporate is based on present assets and the scope of their realisability. There are definite policy guidelines for writing off bad loans; these are applicable to farm loan waivers also. The RBI objects to waiving loans for all borrowers from a particular geographical area, simply on the basis of land holding. This sets a bad precedent. When borrowers have sufficient assets to repay why write off such loans?
S Kalyanasundaram
Beat the problem
This refers to ‘A water-starved India by 2050’ by Vineeth Menon and Lakshmi Poti. This is a crisis that can derail the economic and social development of the country and impact the health and livelihood of millions. The silver lining is that industry and the Government are seized of the gravity of the issue and are implementing projects to mitigate the crisis.
The need of the hour is to adopt sustainable and smart water management practices at the individual and collective levels.
Philip Sabu
Thrissur, Kerala
India extracts more groundwater than any other country. China is tackling water shortages in its NE provinces through the ambitious South-North Water Diversion Project, which has already cost $22 billion.
This aims to pump water from the Yangtze River to Beijing. A pity that we fight over the SYL canal and even fill it back in parts out of mutual spite.
R Narayanan
Ghaziabad, Uttar Pradesh
Sorry state
It is sad that the family of wrestler Khashaba Jadhav, who won India’s first Olympic medal back in 1952, has had to put up the medal for auction in order to generate funds to start a wrestling academy. Wrestlers need good nutritious diet and minds free from financial worry so that they can concentrate on the sport. Many dedicated coaches are still training wrestlers only out of passion for the sport despite financial constraints. The Government and sponsoring organisations should come forward and allocate sufficient funds and encourage wrestling.
TS Karthik
Chennai
Corruption rules
The BJP has long claimed that it is a party with a difference. Its claim to fame is that it is incorruptible. But the Vyapam scam in Madhya Pradesh involving thousands of crores of rupees, the ₹20,000-crore petroleum scam of Gujarat, and the Rajasthan cricket scam have been convenient glossed over. The media have also not shown great interest in them, leading to the suspicion that they are friendly to the BJP.
The medical scam in Kerala and the allegations involving Venkaiah Naidu in Telangana are the latest to hit the BJP. The ₹5.6 crore allegedly handed over for approval from MCI is now said to be “consultation fees” and not a bribe. The identity of the agents in New Delhi for the Kerala BJP leaders is not known. The favours allegedly shown to Venkaiah Naidu’s son in the purchase of vehicles by the Telangana government have now cropped up. The media’s lack of interest in scams involving BJP leaders is telling. The irony is that despite all these scams the BJP claims the high moral ground.
G David Milton
Maruthancode, Tamil Nadu
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