Letters: Reviving a legacy brand

Administering the closure of Air India should not have raised eyebrows given its heavy liability

Reviving a legacy brand

With reference to “Giving Air India another shot at survival” (June 24), only days earlier it was reported the national air carrier has a heavy debt of Rs 46,570 crore (June 21). We are observing various approaches that are being discussed for the revival or closure of Air India (AI). But the moot question is why the revival issue is being discussed across the board. Ideally, administering the closure of AI should not have raised eyebrows given its heavy liability.

But the reason lies in the emotional connect with the Air India brand and its popular logo of the Maharajah who welcomes us to the skies. Air India is after all a legacy brand. As a pioneer airline, it is associated with an equally majestic brand in Tata. No less a person than the legendary JRD Tata started Air India as Tata Airlines before Independence. Nevertheless, all-out efforts should be made to revive Air India and restore its finances. The revival package can be a mix of bonds and some amount of privatisation.

Sunil S Chiplunkar, Bengaluru

No quick fix to NPAs

The recently passed bankruptcy code has given the Reserve Bank of India (RBI) and banks enormous power to resolve bad loans (non-performing assets). However, it would be naïve to expect solutions to these grave problems overnight. The procedure devised in the system entails a long period of initially 180 days, with further extension of 90 days, if a reasonable solution is not arrived at. The better alternative for banks could have been to sell their bad loans (approximately Rs 7 lakh crore) to asset reconstruction companies (ARCs) which will then undertake the tedious task of resolving bad loans.

This would mean banks would have to take a haircut and sell their bad assets to ARCs at a discount. But that would have enabled the banks to resume their core business of lending to prospective borrowers. However, this would also mean the government will have to sufficiently capitalise these banks for the loss incurred in disposing of bad assets. Maybe, the RBI in consultation with the finance ministry will have to ponder over the matter for finding a lasting solution to the huge amounts of NPAs in the banking industry.

Satish Murdeshwar, Pune

Blessing in disguise

With reference to “Forced marriage” (June 21), in my opinion the views presented in the editorial are lopsided. A merger will be beneficial to the officers of small public sector banks (PSBs), especially the younger cadre. The officers in the small PSBs are getting the lowest perks but the amount of stress and work pressure is the same. Rather, small PSBs adapt to changes at a very slow pace leading to huge levels of frustration in the workplace. At least merging into a big bank will ensure systems and process flows get upgraded and are at par. For instance, a small PSB officer in scale II gets a lease rental allowance of just Rs 11,000 for a city like Delhi as compared to Rs 25,000 that a State Bank of India or Punjab National Bank officer gets at the same scale. We expect a merger to at least end such disparities. The spineless bank unions have utterly failed on this front.

As far as the NPAs are concerned, a majority are under consortium or multiple banking arrangements where one borrower has taken the loan in chunks from various lenders. Hence, on an aggregate level consolidation won’t affect the present scenario. In fact, borrowers with a poor credit record often choose small PSBs in the consortium leader as the top management is more accessible for manipulations.

The aspect of cultural compatibility is irrelevant in this context. Mindless growth targets and blatant comparison with the private peers has led to a culture of sycophancy and presenteeism where employees are only expected to sit late daily beyond office hours, work on holidays and never take any leave, if they wish to grow in the organisation. Basically, a PSB banker is expected to do away with the concept of a work-life balance. Hence, I feel a merger will be a blessing in disguise to the PSBs.

Apoorva Tiwari, New Delhi

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