Letters: Prevent Remove bad assets

With reference to Sheetal Agarwal’s report, “FY 17 credit growth to lag GDP growth” (March 24), lending capacity of the banking sector, especially that of public sector banks, and the ability of businesses to borrow are decelerating. This is damaging the investment climate.

 

Under-utilisation of installed capacity of the manufacturing sector due to sluggish growth of consumption and demand for goods and services needs to be checked. Moderately higher lending rates of financial intermediaries are pushing businesses to raise resources from the bond market, thus adversely affecting bank credit expansion.

 

In order to speed up resolution of bad assets, the government must look to remove them from the books of public sector banks. Considering the need to boost private investment it is imperative to strengthen lending capacity of banks. V S K Pillai   Changanacherry