PSBs need level-playing field

Talks are reportedly going on about mergers in the public sector banking space. Merger will hold well as long as there are synergies and economies of scale. Even the merger of a weak entity with a strong bank has to be such that the merged entity should be able to absorb the shock within a reasonable period of time and capitalise on the new strength acquired and reap the benefits in the medium to long term.

In today’s fast changing economic environment, we see even smaller banks performing exceedingly well, exhibiting the highest standards of operational efficiency while some of the bigger ones are struggling to come to terms.

Big banks in such an eventuality hold potential to cause systemic risks to the system and the solution lies in addressing the crux of the issues and the bottomline. PSBs need greater functional autonomy and a level-playing field to compete with others.

The article ‘Understanding the rise and rise of markets' (August 7) has nicely analysed the recent trend in stock markets in India. The way the money is being deployed points to the imminent dangers in the times ahead. It seems that a position is being built up where a cartel of mutual fund managers are in a position to influence the markets in a manner they wish.

The need to broaden and deepen the bond markets is, therefore, more pressing now than ever before. In this context, the reported decision that market regulator SEBI is considering making it mandatory for large companies to go in for raising part of their debt from the bond market is a welcome move. It would also provide the required push to the sluggish bond market in India.

Jaipur

This refers to the report ‘Convert SB a/c to ‘basic account’ to avoid maintenance charges: SBI’ (August 7). The decision of SBI in this regard is fair. All public sector sector and private banks should consider adopting this measure. At least the banks should bring down the amounts to be maintained as minimum balance. It should be noted that the minimum balance of crores of account-holders would run into hundreds of crores of rupees which would help banks earn interest by lending. Banking is essentially a service that should benefit the public and not merely the banks to earn profits.

Coimbatore

Recently, instances of auditors quitting audit work at companies have come to light.

This shows that they do not want to be involved in any type of fraud that may take place in future in financial institutions, including banks which were audited by them. The RBI’s recent circular on enforcement action framework on auditing may be one of the factors that has made auditors wary.

In the banking sector, the RBI has prescribed that officers are liable even four years after retirement for any wrongdoing during their service and are punishable if proved guilty.

Such period must be prescribed for statutory auditors also if any fraud is unearthed in banks or financial institutions which they audited even after quitting from auditing.

Bheemavaram, AP

The article ‘Challenges ahead in maternal health’ (August 7), about reduction in maternal mortality rate (MMR), is illustrative. To bring down MMR further from 130 per one lakh child births there is a need to practise family planning; educate women about care from pre-natal to post-natal stage; provide quick access to ante natal care units; ensure skilled care before, during and after childbirth; prevent complications of pregnancy through early detection and treatment; provide clean and safe delivery; and take recourse to institutional delivery.

Pune

In the Editorial ‘Paper chase’ (August 7), the blurb should have read TRAI’s ‘recommendations’ and not ‘discussion paper’. The error is regretted.

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