Attracting bank deposits
This refers to ‘Amp up deposits, FM tells PSBs’ (August 20). The rising credit-deposit ratio in banks is a cause for concern. With only 73 per cent of deposits available for redeployment after accounting for CRR and SLR, the problem is further exacerbated. Traditionally, India is known as a saving economy, unlike Western countries where consumption and spending are prioritised. However, Indian depositors increasingly seek investment products that offer attractive, inflation-adjusted returns. With fluctuating food inflation, few bank investment products currently outpace inflation.
While the Finance Minister’s focus on attracting depositors back to banks is a step in the right direction, concrete measures are needed to arrest the decline in deposits. Deposit rates must be fine-tuned so that inflation-adjusted residual returns remain positive, avoiding the negative returns seen during the Covid-19 pandemic. The tax exemption limit on interest from deposits should be substantially increased.
Srinivasan Velamur
Chennai
Timely credit vital
Deposits form the main resources of lending for any banking system. Recovery of stressed assets through different recovery steps aids in further providing funds for increased demands of lending. Public sector banks have a greater responsibility in extending need-based credit to MSMEs or disbursing other Mudra loans, avoiding delays be it at the stage of identification of the genuine borrowers or in credit releases subsequently. The very idea of creating regional rural banks is to ensure meeting of all credit demands of the rural folk at the micro level. It is also noteworthy that the Finance Minister has advised SIDBI to help RRBs build a sound MSME portfolio at the grassroots level itself by providing timely refinance.
Katuru Durga Prasad Rao
Hyderabad
Non-teaching staff
This refers to ‘Non-teaching staff ignored’ (August 20). If we take an educational institution, non-teaching staff such as clerks, receptionists, supporting staff, and so on are indispensable. The wheels of schools, colleges or universities cannot move smoothly without their services. The suggestion of calling non-teaching personnel Academic Support Professionals is laudable. Titles can propel individuals to do their bit exceedingly well.
S Ramakrishnasayee
Chennai
Regulatory scrutiny
This is with reference to ‘PwC loses major client Bank of China amid regulatory probe’ (August 20). PwC, once the dominant auditing firm in China, has lost its largest China-listed client, Bank of China (BoC), to its rival EY. This shift comes amid growing regulatory scrutiny over PwC’s audits, particularly those related to the troubled property developer Evergrande Group. About half of the corporate clients that have dropped PwC have been snapped up competitors. Chinese regulations stipulate that state-owned firms should not employ the same auditor for more than eight consecutive years, which may have also influenced BoC’s decision to shift to EY.
S Muthulakshmi
Virudhunagar, TN