Capitalisation of PSBs
In the context of Basel III norms to be made operational soon, public sector banks (PSB) should be laying increased focus on augmenting the capital base. It is estimated that PSBs will need about Rs 1.5 lakh crore of additional capital in the next six years, or in other words close to Rs 25,000 crore annually. But if the past experience in terms of government’s budgetary capital infusion is anything to be believed, the government perhaps is nowhere near this figure and the fiscal situation either has not improved much, over period (“PSBs must augment capital to survive Basel III tough norms”, FE, November 11). Credit growth is vital for banks to maintain a healthy credit deposit ratio and other financial parameters too, including profit for sustenance. That, in turn, will help the economy pose a decent growth rate. The government, as the largest stakeholder in the PSBs, has a greater role to play to ensure sufficient capitalisation of PSBs, both to comply with the regulatory provisions and expand their balance sheet size.
Expectations from Obama
This refers to the column “How green coloured the US elections” (FE, November 24) by Frank-Jurgen Richter. Barack Obama is on the hottest seat in the world again. Obama is a very good speaker. His Cairo speech to the Muslim world was historic and path-breaking. The speech was a laudable attempt at creating reconciliation between the Muslim world and the West. But deeds are louder than words. So, in his second term, we expect Obama will create strong and healthy relations with the Muslim world, especially the Middle East.
P Senthil Saravana Durai
Debate on retail
“Cracks in Oppn may help govt push reform agenda” (FE, November 23). Whether the government agrees to have a discussion on FDI in multi-brand retail under rule 184 or not, there should be full debate on the subject without disruption. If the government survives as expected, important Bills should be allowed to be passed in the interest of the people. Then the question remains whether the government could work fast to bring any turnaround in the remaining period?