With reference to Shekhar Gupta's report, "If you flaunt while owing a lot, it suggests you don't care: Raghuram Rajan" (January 28), the Reserve Bank of India governor has certainly engaged in some tough talk. This indicates the seriousness of the concern. His message is loud and clear: Wilful defaulters cannot take the system for a ride, play ducks and drakes with public money and at the expense of other borrowers, including small borrowers who have to shell out more money due to the increased cost of procuring funds.
Pitching a strong case for small borrowers, Rajan said problems had to be dealt with in such a manner that established businesses didn't close down but entrepreneurs got a great opportunity to build their businesses. It is evident that Rajan's comments are directed at some bigwigs who owe huge sums to banks, are not able to service the loans they took and yet don't shy away from extravagance.
A large number of non-performing loans have delayed the growth of banks. The total number of stressed loans is to the tune of Rs 7 lakh crore. These loans are a serious drain on profit. Banks are the instruments of socio-economic development and the lifeline of the economy. The good health of banks is necessary for achieving sustained growth.
Srinivasan Umashankar, Nagpur
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