(February 27/28, 2016, No. 9/2016)
Feel free to mail your views on this edition of WL to mgwarrier@gmail.com
Another view on inequality and hunger
On the morning of February 24, 2016 a small shop near Bhandup Railway Station  caught fire and was gutted. I couldn’t go to the newspaper vender as smoke and fire force scared me. I missed my usual finance newspapers that morning. Any calamity is an opportunity. That gave me a chance to read “The Rhetoric Of Inequality” by former Procter & Gamble CEO Gurucharan Das published in The Times of India that day. The article gives a fair idea about how those who have never been hungry, or have forgotten the ‘hungry days’ looks at hunger. Das claims that ‘carping over inequality’ tantamount to ‘debating what was settled long ago- you don’t make the poor rich by making the rich poor’. Excerpts from the article:
“I have always believed that it is none of my business how much the Ambanis earn as long as they create lots of jobs, pay their taxes and produce wealth for the society. The aam aadmi cares mostly about how he is fairing; he sometimes compares himself to his friends but never to the filthy rich.
Judging the lifestyle of others tempts one to control other things, and this is a short step to becoming a command society. Not to live ostentatiously is a call of Dharma, not a legal duty.”
I am totally ‘brain-washed’ by Gurucharan Das and I leave it to you think for yourself, for now. If I am able to come out of the ‘damage’, I will be back with my views later!
February 22, 2016
Needed, higher insurance cover
This refers to Aarati Krishnan’s article “Deposit insurance: what you didn’t know” (Real returns, February 22). The article brings together in one place several FAQs on deposit insurance with answers explaining factual position. The article will serve a larger purpose, if policy makers take cognizance of the constraints within which DICGC is functioning today and initiate moves that will help the organisation recast its vision and mission to conform to the present scenario in which banks and financial institutions are working in India today. Such a makeover for DICGC may have to factor in:
(i)                The resources at DICGC’s command at Rs50,000 crore is not small. But, it is inadequate to meet the business expansion the corporation may have to think of, if the confidence deposit insurance should instil among depositors is to be restored. DICGC may also have to revisit credit guarantee, a function it exited some time back, in the changed environment.
(ii)              Since 2014, there has been some effort to professionalise DICGC. This need to be taken forward.
(iii)            The anomalous situation arising from commercial banks meeting the cost of the inefficiency of cooperative banks will have to be rectified.
(iv)            The corporation should apply its mind as to whether continuing the level of deposit insurance should be retained at a low of Rs one lakh. Perhaps the threshold should be raised to a level to provide cover for at least 50 per cent of bank deposits.
(v)              Corporation could consider expanding its ambit to all financial institutions regulated by RBI which are accepting deposits from public. This may need differential rates of premia and coordination with regulatory and supervisory arms of RBI.
M G Warrier, Mumbai

February 17, 2016
Stop speculating on RBI
Apropos “RBI Guv and Never Ending Speculation” (Economic Times, Money & banking, February 17), one wonders why ET should join the speculators. It is common knowledge that even in 2013 when Dr Raghuram Rajan was being tipped for the Governor’s position, there were other influential contenders and an opposing school of economists who were spreading all sorts of rumours against Dr Rajan. They were again active during the first half of 2014, gossiping about the possibility of a change of guard at Mint Road, post General Election.
It is India’s good fortune that Dr Rajan survived the moves against him, so far. World has acknowledged that the leadership provided by Dr Rajan in the conduct of RBI’s affairs has been excellent. If India decides and Dr Rajan accepts on a longer term re-appointment, this paper should not have a doubt about Dr Rajan’s capability to sort out his personal relationship with the University with which he has had an enduring relationship for the last two decades.
As any new incumbent governor in RBI takes minimum six months to ‘settle down’ and the ‘work-in-progress’ there now needs continuity in leadership, GOI may not think in terms of replacing Dr Rajan in September 2016 and perhaps offer a re-appointment for a longer tenure. But, reports like this can help gossip-mongers and have some impact on the thought processes of economists and media which can influence economy adversely.

Business Standard
February 26, 2016
Banks’ health worries
This refers to Sudhir Keshav Bhave’s letter “A sinking ship” (February 26). This could be an example of how transparency in a sensitive business like banking can spread panic. The Indian banking sector is not in as bad a shape as is being made out by some analysts and external agencies. Major Indian commercial banks including SBI have been able to meet all statutory requirements. Unlike their corporate co-travellers, banks are meeting their payment obligations on due dates and in the recent past there have been no bank failures in the commercial banking sector in India. Part of credit for this should go to the vigilant regulator. This is not to argue that all is well as regards functioning of commercial banks.
There is immediate need to restore the health of the banking system impaired mainly by reluctance of big borrowers to make timely repayment and heavy burden on public sector banks (PSBs) arising from workload and drain on resources in performance of social responsibilities.
There is no point in arguing now that the overhaul and professionalization of public sector banks (PSBs) should have happened along with bank nationalisation and there should have been regular ‘health checks’ and ongoing corrections. Just as a ‘health check-up’ does not change the condition of a person, the re-classification of more loans as NPAs does not alter a bank’s ability to change. The need of the hour is to support banks to recover their dues from borrowers who have the capacity to repay, infuse professionalism in the banks’ working and restore the faith in the banking system.
As private sector banks have failed to perform their responsibilities and are not too willing to grow (their share in banking business is less than 30 per cent), privatising the existing public sector banks is no solution. Perhaps, GOI should consider nationalising entire banking business and restructuring the banking system to serve public interest.
M G Warrier, Mumbai
A suggestion shared by a  doctor, worth accepting*

Each individual must take note of the three ½ minutes. Why is it important?
Three ½ minutes will greatly reduce the number of sudden deaths. Often this occurs when a person who still look healthy, has died in the night. We hear stories of people suddenly die? The reason is that when you wake up at night to go to the bathroom, it is often done in a rush. Immediately when stand up, the brain lacks blood flow.
Why "three ½ minutes" is very important? 
In the middle of the night when you are awakened by the urge to urinate for example, ECG pattern can change. Because getting up suddenly, the brain which is anaemic can lead to heart failure due to lack of blood.
Hence, always practice " three ½ minutes", which are:
1. When waking from sleep, lie in bed for the first ½ minute;
2. Sit in bed for the next ½ minute;
3. Lower your legs, sitting on the edge of the bed for the last ½ minute.
After three ½ minutes, you will not have an anaemic brain and heart will not fail, reducing the possibility of a fall or sudden death.
Share with family, friends loved ones. It can occur regardless of age; young or old.
Sharing is Caring. If you already know, regard this as refresher!

*Copied from an email received from Vathsala Jayaraman (Exrbites Group)


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