Need bank reforms
Need bank reforms
This refers to the report “Banks may need R1lakh crore to hedge high-risk lending to corporates” (August 7).While banks are playing a vital role in the growth and development of the country, it is of paramount need to keep these growth engines healthy and sound enough to meet any type of eventualities. Banks have fallen prey to the inefficiencies of infra, iron and steel, and the power sectors, which are starved for demand. High cost of borrowing is pushing companies in these sectors to become debt ridden, finally making them unable to service their borrowings—this has left the banks with heaps of NPAs. Thus, banks themselves directly or indirectly pave the way for impairment of their assets. However, the government and the banking regulator, the Reserve Bank of India need to do an in-depth study on the lending rates of banks and look for initiating remedial measures to have affordable rates to revive the ailing sectors and economic activities. Apart from that, the government must look at implementing radical reforms, particularly those that benefit the infra, iron &steel, and power sector in order to get their multiplier effects on the economy. Prevention of further impairment of loans and sizeable recovery of bad assets are to be the main agenda of banks to keep them self-reliant for capital, and the government must abstain from infusing capital frequently in public sector banks at great costs to the exchequer; such making good of the erosion of capital is not prudent, besides being detrimental for fiscal discipline. Comprehensive reforms in the banking sector and in the legal system are also the need of the hour to deal with the menace of bad assets. Despite the government’s struggle to turn around the economy, the opposition seems to be hell bent on bringing down the country’s growth and development.
Honouring Dr Kalam
It is really unfortunate that the country has miserably failed to honour the memory of former president, and the father of India’s nuclear-capable, long-range missile programme, Dr APJ Abdul Kalam. Though he was born in Rameswaram, there should have been a lying in-state for his mortal remains in New Delhi where dignitaries from around the world could have come and paid their respects. If he were buried in the national capital—the final resting place of many of India’s leaders—a creating a fitting memorial could have been created and visited by dignitaries to commemorate his anniversaries. For a man who unceasingly worked for the glory of the nation, the government should have come forward to conduct his last rites in the capital and created a fitting memorial after convincing his family with reasons for doing so. It is still a mystery why the government at the centre failed to do so, but rushed his body to his native place and sealed the deal with the presence of the prime minister at the funeral! There is news doing rounds that a new rocket launching station is going to be set up in Kulasekaranpattinam in Tuticorin district. It would be honouring Kalam’s memory if this rocket station in Tamil Nadu is named after him.