RBI keeps a watchful eye

Apropos ‘RBI central board reviews current economic, financial situation’ (October 17), this review notably comes even as the RBI’s monetary policy remains focused on aligning inflation with the target on a sustainable basis while aiming at higher economic growth amidst the many challenging externalities.

Since the central board of the RBI also comprises nominated government officials as its directors, the government remains fully aware of various key developments taking place at the central bank. This also ensures the government and the RBI are usually on the same page.

Kumar Gupt

Panchkula, Haryana

CD ratio for SFBs

This refers to ‘A case for easing CD ratios for small finance banks’ (October 17). The easing of CD ratio for small finance banks should go along with strict vigil on non-performing assets (NPAs) to ensure that the system is reliable and remains robust. Many small or marginal ‘savers’ trust these SFBs with their small savings. Ever-greening of advances should not be allowed to happen at any cost.

Jose Abraham

Vaikom, Kerala

For a vibrant polity

This refer to ‘Nobel lessons for India’ (October 17). We ought to look back to our own established ancient wisdom. Kautilya in 300 BC, sanely averred that wealth cannot be built by a few without the labour of society at large and that the society has the rights to that wealth corpus. The hallmark of a vibrant polity is constant course correction, to be in line with the aspirations of the people on whose mandate our entire socio-political architecture is constructed. Tarkha Shastra, as the means to evolve superior systems,was espoused by Kautilya to help strengthen and enrich every institution.

R Narayanan

Navi Mumbai

Food inflation

Apropos the editorial ‘Sticky issue’ (October 17), many factors are affecting the demand and supply of food articles and, thereby, the prices of those commodities. The persisting underdeveloped infrastructure especially with respect to storage facilities for farm produce, inaccessibility to competitive markets and the prevailing elevated cost of production are affecting the smooth supply of the produce, which in turn pushes up the prices.

With increasing demand from consumers, the mismatch between supply and demand for farm products is widening, which again is a cause for food inflation.

VSK Pillai

Changanacherry, Kerala

Deposit insurance

This refers to ‘Does deposit insurance deliver?’ (October 17). The failure of Punjab and Maharashtra Co-operatve Bank in 2019 shone a light on the limitations of India’s deposit insurance system. The DICGC-covered depositors could get a mere ₹1 lakh per deposit. Such incidents erode depositor confidence and threaten financial stability. The deposit insurance limit should be raised from ₹5 lakh to at least ₹10 lakh. At the same time, a risk based premium may be collected from unsecured banks to enable DICGC make quick and timely repayment to depositors.

P Victor Selvaraj

Palayamkottai, TN