UPS: Welcome move
This refers to your Editorial ‘Sound compromise’ (August 27). The Centre deserves credit for the timely rectification of an injustice meted out to a section of government employees who joined service after 2003, as they are still in service.
One of the reasons for the hasty introduction of NPS was government’s unpreparedness to fund the OPS which was being implemented on a ‘Pay-As-You-Go’ basis.
The worry over extra burden on taxpayer is misplaced as an employer will be aware of the cost-to-company impact with every change in wage components and government will know how to adjust the overall wage bill consistent with market realities. Private sector employees, now under EPF, must be brought into UPS.
MG Warrier
Mumbai
Good proposal
This refers to the news report ‘After UPI success…’ (August 27).
The RBI’s Unified Lending Interface proposal is welcome. At the same time, one hopes that the guidelines issued adequately address the aspects of credit risk.
The eligibility criteria, respective credit ceiling and necessary caveats must be clearly spelt out in the guidelines to avoid the digital loans becoming duds.
R Mohan
Kumbakonam
Banks’ conundrum
This refers to the article ‘Loan recovery: How banks blot their own copybook” (August 27). The inclusion of Net Interest Margin (NIM) as part of loan recovery when calculating the overall recovery rate for loans that turn into NPAs is not a convincing approach.
A critical flaw in this approach is that while NIM is considered part of recovery during the ‘standard’ phase of the loan, the loss of income from NIM when a loan becomes an NPA, until the point of ‘haircuts’, should also be factored into the overall recovery calculation. From another perspective, depositors could argue for a share of the NIM, since it represents the difference between the higher interest collected on loans and the lower interest paid to them. Therefore, NIM should not be included as part of recovery during the NPA phase.
Srinivasan Velamur
Chennai
Regulating digital markets
This is with reference to ‘Digital Competition Bill’, (August 27). In 2023, the government formed the Committee on Digital Competition Law (CDCL) to examine the need for an ex-ante regulatory mechanism for digital markets in India.
The Bill doesn’t convincingly show that India’s current ex-post framework is insufficient or that the ex-ante regime’s benefits outweigh its harms, potentially reducing dynamic competition.
Second, the Bill’s definition of SSDR needs changes for it mainly targets companies based on size, not market power.
Third, following the EU’s model, the Bill bans activities like self-preferencing or bundling without allowing firms to justify their actions, stifling innovation and harming consumers. Therefore, it is a welcome move.
P Sundara Pandian
Virudhunagar