Safety of banks

Apropos ‘Protecting banks against failures’ (April.4), a one-size-fits-all approach will not work. Banks located in India and elsewhere are structurally different. The only risk which Indian banks are exposed to is in terms of going for exotic derivative products which are used by banks across the globe but are basically speculative in nature having contagion effect. In this regard, the RBI has been adopting a very cautious policy, allowing banks to extend only vanilla derivative products like call/put options to customers. However, individual bank boards need to ensure a robust balance sheet management and corporate governance structure to protect stakeholders from downside risks.

Srinivasan Velamur

Chennai

Tighten surveillance

As public sector banks having sovereign backing are critical in the Indian banking space, the likelihood of a banking crisis isn’t perceptible. However, since depositors are the main contributors to financial intermediation, safeguarding their money and confidence is vital to the very existence of the banking system.

Despite the prevailing norms on capital adequacy, income recognition, asset classification and governance, many banks fall short on implementation.

Though the RBI has data on divergence by banks, shortcomings persist. Being the regulator, the RBI must tighten its surveillance as depositors’ and investors’ interests are prime.

VSK Pillai

Changanacherry, Kerala

Drive against corruption

This is with reference to ‘Go after the corrupt, PM Modi tells CBI’ (April 4). One of the main reasons for the underdevelopment of the country is that hundreds of crores of rupees, which should have rightfully gone to the national treasury, is pocketed by a handful of corrupt people.

The government’s various initiatives such as demonetisation, tax reforms, closure of shell companies, agricultural reforms, weeding out of archaic laws, digitisation, the Insolvency and Bankruptcy Code and Direct Benefits Transfer have to some extent helped improve economic and development outcomes. Also, the government should protect whistle-blowers. The public, on their part, can weed out corruption by sending people with a clean record to Parliament/State assemblies, and not pay bribes to get their work done.

Veena Shenoy

Thane

Address the skill gap

Apropos ‘Indian pharma sector needs a dose of upskilling and reskilling’ (April 4), India is the largest provider of generic drugs globally. With the global markets reducing their dependence on China for drugs, it is expected that India will fill that gap by ramping up production and exports of generics and APIs. This represents both an opportunity and a challenge for India’s pharma industry to redefine its processes and approaches. The redefinition needs to start from assessing individual employees in terms of their skill levels. Once assessed, the development areas need to be addressed through employees being reskilled or upskilled to cope with the new technologies.

P Sundara Pandian

Virudhunagar, TN

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