Cross-border insolvencies

With reference to “Ticklish issues in cross-border insolvencies”(October 29), the article is very informative and calls for very correct steps to be taken to save cash from being looted by unprincipled and persons. The recent incidents make a strong case for a suitable legal measure for prevention of such attempts involving huge amounts. International diplomacy might have a place in the enactment of laws to prevent misuse of insolvency.

The issue needs to be examined in very detailed and critical manner by a panel of knowledgeable persons by the relevant department of the government and further steps taken to create legal provisions against the offenders.

Coimbatore

Although the regulator’s strategy of relying on OMO to induce liquidity in the economy is welcome in the short term, it conflicts with the larger objective. The financial markets have turned volatile of late, on account of geopolitical turbulence, mounting inflationary pressures and proposed restrictions on imports. Further, large intraday positions and speculative trading in the commodity market, have discouraged long-term holdings. Liberal norms to increase the investment limit, reduce cost of fund-raising, fast-track FPI registrations and exemption of withholding tax on bonds — ought to be backed by a higher interest rate to generate greater revenues and control the fiscal deficit. Higher availability of funds would facilitate lending at a relatively lower rate of interest and can defeat the very purpose of restrictive PCA Norms for lending or caution-based ICA approach for syndicate/consortium lending. OMO can encourage surplus domestic production for exports — however a very high liquidity or cash supply can aggravate inflation and affect FPI-confidence on account of lower currency-valuation.

Delhi

With reference to the editorial ‘Ominous signs’ (October 27), the developments at the CBI are unparalleled as well as unsavoury. The issue clearly must go far beyond the top two honchos of the organisation. Had the tiff been on some administrative misdirection or predicated on excessive clash of egos, the fallout could have been contained. But trading charges of corruption at the highest levels of an apex investigative body is surely the tip of the iceberg. The rot therefore, is far more frightening than a mere duel at the top. The political class, which is prone to manipulate agencies as these, stands to cause harm to the overall integrity of governance in the nation.

We must be thankful that despite the government’s more than frequent run-ins with apex court, we continue to enjoy the sane aegis as an anchor constitutional entity that helps us ride out severe crises.

Navi Mumbai

Ever since the previous RBI Governor Raghuram Rajan left the office on not so good terms, tensions between the RBI and the government has been growing. On various issues the government has locked horns with the RBI, — demonetisation, interest rates, Nirav Modi scam etc. There are some areas that fall within RBI’s domain and the government must not encroach in it. The current issue involving RBI’s nominated director S Gurumurthy’s plea to the RBI for relaxing norms for small businesses made RBI Deputy Governor Viral Acharya warn the government against interfering with the regulator’s day-to-day functioning. Given that the tussle within the CBI has already dented the PM’s reputation, such misadventure from the government’s side in RBI’s working is not desirable. The government must instead focus on reviving the MSME sector. Institutions such as the CBI and the RBI must remain completely autonomous.

Noida

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