Global contagion

This refers to the editorial ‘The meltdown’ (February 12). The mayhem on Dalal Street on Thursday shaved off ₹3.18 lakh crore from investors. The Sensex fell by 807.07 points to close at 22951.83 points, its lowest closing level since May 2014. The market capitalisation of BSE-listed companies this year fell by 14.02 per cent. The sell-off in the Indian market was not an exception but a result of the contagion effect of the steep cut in the Asian and European markets. So long as the markets are integrated, weaknesses in major markets will spread to other markets, however strong they are fundamentally.

Philip Sabu

Mannuthy, Kerala

Check the malice

This refers to the report “Balance sheet clean-up hits banks; for long-term good, says Rajan” (February 12). This exercise should have been taken up long back on a continuous basis. Rather, the banks were allowed to resort to window-dressing for a long time and no one knows what the real position of the banks is. It is good that at least now the banks are making adequate provision for bad debts.

In fact, the identification of NPAs should not be left to the individual banks; this job can be taken up by the RBI so that no bank is tempted to cook its books. It is also better if net NPAs are brought to zero level every quarter so that there will be no sudden shock, as is happening now.

S Kalyanasundaram

Email

Can’t bank on them

PSU banks clearly have a huge problem with their balance sheets and this has not come up overnight. Governor Rajan has been speaking about this for some time now and has asked banks to recognise the NPAs and move on. He has given the banks enough time to clean up the mess and even asked the government to provide capital for PSU banks. Both the bank managements and the government did not respond to his call adequately. Without capital, a large part of the banking industry is in trouble and a piecemeal approach by the government in handling this issue is helping neither the banks nor the economy.

CR Arun

Email

Fruit of a downturn

The pile-up of bad loans with the banks is the culmination of the economic downturn and the failure of the promoters of corporates to put in funds and efforts to tide over the situation. Now that the banks are going to take the hit on their balance-sheets for the failures, it remains to be seen what the promoters will contribute towards the revival of the companies. If banks alone are to suffer for the bad loans, it will encourage the recurrence of similar situations again. New regulations to prevent diversion of borrowed funds and ring-fencing of promoters’ assets should be brought in.

M Raghuraman

Chandivali, Mumbai

No poll dance, this

While the US election process may provide entertainment by the contestants for presidentship, it is elaborate and requires the candidates to “market” their suitability throughout the 50 States before their party makes the ultimate choice. (“US elections: a bluff and bluster show” by Rama Ramaswami, February 12). The process tests the calibre and persuasive powers of the candidates for days together, in which yet another Bush has to prove his worth.

Compared to this, our election process fails to filter out the criminals from becoming members of legislatures and tainted or unsuitable politicians becoming prime minister. The difference between the election systems of world’s oldest and the biggest democracies is worth deep research.

YG Chouksey

Pune

Our man Headley

Internationally notorious terrorist David Coleman Headley’s deposition on Ishrat Jahan is taken as ‘gospel truth’ by the BJP as it suits it fine politically. It is not just construed as a vindication of its stand on encounter deaths, but also celebrated as a sort of victory.

It is significant that a ‘double agent’ and the BJP are making the same accusation against Ishrat Jahan without corroborative evidence.

G David Milton

Maruthancode, Tamil Nadu

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