This refers to your editorial, “Wilful lenders” (September 3). The banks gave ₹7,000 crore to Kingfisher Airline and in the process paid Vijay Mallya a 1 per cent commission for his personal guarantee. If these banks have the required personal guarantee, why are they not attaching the equity and real estate owned by Mallya to recover their loans? If these banks give loans with unlimited risks how can we expect to grow? Anyone can start an airline if they freely get ₹7000 crore. Let’s not burn more money to help our cronies. Bring the stakes in PSU banks below 50 per cent and allow professionals to run these banks so they stay clear of Kingfisher and Bhushan Steel-type trouble.
CR Arun
Your editorial is an objective analysis. The declaration of Kingfisher Airlines as a wilful defaulter by United Bank of India is akin to a damp squib and closing the door after the horse has bolted. The bank has allowed things to drift; its latest move is half-hearted. Had it taken timely action, the airline and its directors would have seen the writing on the wall much earlier.
CG Kuriakose
Kothamangalam, Kerala
If borrowers who are very likely to become wilful defaulters are allowed to get away scot-free, it would be a dreadful banking scenario. As the primary function of banks is to collect deposits for the purpose of lending, it is natural they will be “wilful lenders”. The consideration of an account as NPA and attributing wilful default for such classification are different issues. An asset become non-performing if the interest or principal is not received within the time set and will be automatically classified as such by the bank. But to attribute the reason as wilful default needs deeper study of the unit and its promoters.
Any banker will be interested in recovering his NPA and if he feels recovery is possible by more lending, he will not hesitate to do so. If some unit is in ICU, it may not be proper to disconnect the life support system. There are various stakeholders whose interests cannot be sacrificed just like that.
It is not prudent to analyse the decision taken in the past with the facts and figures available today. Comparing the lending by private banks and public sector banks is like comparing apples and oranges. Public sector banks are expected to do social lending and be in the forefront for various government schemes, which no private sector bank will undertake to do.
S Kalyanasundaram
P Chidambaram rightly said: “Companies become sick, but not their promoters.” The major reason for banks having put up so long with Kingfisher is that they trusted Mallya would somehow repay the debts. Also, the banks evaluated their loans considering Mallaya — for his worth, rather than the actual underlying business. We can name quite a few such instances when banks have lent considering the pedigree of the promoter and not the business. It’s a rude wake-up call for all lenders.
Sridhar Narasimhan
Economic patriotism
All of us Indians — politicians, industrialists, businessmen and others — should be patriotic like the people of China, Japan and the US. We should produce and manufacture products of the best quality with zero defects.
Similarly, all India-based services should be world class. Such products and services will be attractive and the whole world will purchase them from India. The mentioned countries and their politicians, industrialists and businessmen always give priority to their home-made products and services and earn lots of foreign exchange for their respective countries. These countries are far ahead economically because of their economic patriotism.
Simultaneously, we should purchase and use solely Indian goods and services and nothing made in China, the US or any other country. Unfortunately, we’ve started to buy all ‘made in China’ goods, including agarbattis and dhoop meant for the Ganesh pooja, just because they are damn cheaper. But we forget very conveniently that they are made of hazardous chemicals.
Hansraj Bhat
Mumbai
Worrying situation
Amid fears of violence and army intervention in the wake of anti-government protests headed by Pakistan Tehreek-i-Insaf’s chairman Imran Khan and cleric Tahir-ul-Qadri of the Pakistan Awami Tehreek, it is heartening that leaders from across the political spectrum have decided to back the Pakistan prime minister. The charged atmosphere in Pakistan is a matter of grave concern not only to the people of Pakistan but to the international community as well. Nawaz Sharif needs to take the bull by the horns and come down heavily on the protestorsmutineers if the impasse is to be brokenpass.
NJ Ravi Chander
Bangalore
Happy feat
The bonhomie between Japan and India is encouraging. With pragmatic personalities as prime minister in both the nations, the world is going to witness a better growth. A balance of strategic powers is required to reduce the domination by a few nations. In this context the India-Japan partnership will not only inspire the world business environment but also impact geo-political relationships.
The $35 billion deal sealed by Narendra Modi in Japan must be welcomed by every Indian. His vision to create clean India, smart cities, digital India and bullet trains are futuristic and necessary plans. Some may oppose bullet trains and smart cities saying that basic amenities are required. We cannot sacrifice one for the other. Both must happen simultaneously. Only then will we catch up with the developed nations and somewhat equalise our society. With the help of Japanese capital, technology and expertise India can move forward. On the other hand, India’s human resources and labour can help Japan.
A Prabaharan
Tiruchirappalli