Letters: Welcome step

With reference to "Indradhanush set to get bigger, better" (June 6), amid the elevated bad assets and losses incurred by many public sector banks, the government's likely plan to move forward with Indradhanush-II is a welcome step. Its plan to focus on areas like NPA (non-performing assets) resolution, risk management, credit growth, expansion of digital banking, financial inclusion and creation of a holding company will go a long way in removing the stress of public sector banks.

But, at this juncture the government should look for ways to quickly recover the bad and written off loans. The growing bad assets have an adverse impact on the confidence of external and internal investors. The government has to look to eliminate the lag in the judicial system in disposing of recovery cases filed by banks. Obviously to a great extent banks are handicapped due to the lengthy judicial process, and in many cases they fail to realise the dues due to deterioration in the value and quality of the securities charged.

It is imperative to focus on speedy execution of sector-specific reforms to accelerate the generation of cash flows to banks. Also, the banking regulator should aim for cutting the policy rates to improve debt servicing capacity to ease repayment. The government should push forward with Indradhanush-II to make the sector, especially state-owned banks, more resilient.

VSK Pillai, Kottayam

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