Warrier's Collage September 19, 2021

Welcome to Warrier's COLLAGE On Sunday September 19, 2021 Isavasya Recitation https://youtu.be/T8-9Uf_ceOk Good Morning Happy Birthday to all readers having Birthday during the week ending Saturday September 25, 2021. Nice Day M G Warrier Satsangam with V T Panchapagesan Subject : Purpose of Life is to make it WORTH LIVING! Sunday COLLAGE School Name: "LIFE" Class : Retired Students, 60 years & above Teacher takes attendance (Continued at H(a)) A Messages 1) Vivek Amin Nagpur BAD Bank should have following name so as to avoid word ~_BAD_~ Bank for Asset Development (Bad is added by Media... The institution's name will be NARCL. Excerpts from a report : "The Reserve Bank of India is in the process of granting a licence for the National Asset Reconstruction Company Limited (NARCL), following which toxic assets worth ₹90,000 crore that banks have already fully provided for, will move to the NARCL, Financial Services Secretary Debashish Panda said." 2) Dr Charan Singh charan singh (@CharanSingh60) Tweeted: Unity in Diversity - 13 Coming running are death agents - Jamdoot in front of them, I cannot survive Very Rarely, a person comes to say- God protect me, take me in your arms My Master, meet me, free me (from worldly temptations) Trilochan, Sri Rag, 92, SGGS https://twitter.com/CharanSingh60/status/1438961719078907905?s=20 B Current Affairs The Global ANALYST, April 2017 Bad Bank, Good Idea?* M G Warrier Since independence GOI and RBI have revamped and rejuvenated existing institutions at various levels in the financial sector and established new ones wherever a need was felt. The makeover of Imperial Bank to State Bank of India at national level to recent emergence of Payment Banks at ground level and setting up of specialized institutions like IDBI, Exim Bank and NABARD are the result of the joint effort of GOI and RBI. Institutions so established have been playing their role fairly well. The present proposal to have a separate institutional arrangement for handling stressed assets of the banking system has built-in features which can be harmful for the financial sector in the long run. Put bluntly, besides acting as a disincentive for professionalizing appraisal and credit delivery and recovery departments of the banks, the institutionalization of ‘stressed assets’ can further weaken the supervisory and regulatory bodies in the financial system. (Continued at H2) (*Included this article today in the context of my response on the subject published in The Hindu yesterday-Warrier) C Readers' Contribution Connecting to Chicago : V Babusenan Thiruvananthapuram Yesterday, I had a call from Chicago. My friend-cum-relative Dr Sekhar Prasad was at that end of the mobile connection. (Hope my esteemed readers have not forgotten him). He profusely apologized for not calling me for a long time. I said I too could have contacted him but didn't do so because of his honeymoon trips to the Pacific side of America and some European countries despite the Covid epidemic. I told him : "I know Sekhar, before your marriage, you called me frequently as Vasanthi was with us. Don't deny it." Both of us had a hearty laugh. Then he said : "Senan, I have a pretty long time at my disposal. No practice today and Vasanthi is with the Malayalee Club. It is a case of love at first sight." (Continued at H1) D Collage in Classroom Interpreting the Vedas & Upanishads 1) Rig Veda https://www.speakingtree.in/allslides/interpreting-rig-veda/140544 Excerpts INTERPRETING RIG VEDA INTERPRETING RIG VEDA "Rig Veda is the most sacred book of Hinduism. Hinduism is based on it. It is supposed to be written between 1500 BCE and 1200 BCE. It is the most ancient religious book still in use. Rig Veda is supposed to contain facts independent of time, place and person. Because of this, every Hindu tries to find the name of his god in Rig Veda. He also wants a mention in it that his god is the greatest. He refuses to accept gods that don't find a mention in it. Rig Veda contains 10552 mantras. The meaning of most words in it are not known. It is written symbolically. These facts make it impossible to understand it. Some people try to take advantage of this fact and claim that their sacred books are condensation and improvement over Rig Veda. What does Rig Veda contains, that makes it eternally the greatest?" 2) Isavasyopanishad https://www.wisdomlib.org/hinduism/book/ishavasya-bhashya-by-sitarama Excerpts : Summary: The Ishavasya Upanishad (or simply Isha) is one of the shortest of its kind, and basically represents a brief philosophical poem discussing the soul/self (Atman). This edition contains the Kanva recension, consisting of 18 verses. The words “Isha vasyam” literally translates to “enveloped by the Lord” and refers to the theory of soul (Atman); a concept used in both dualism and non-dualism. This book however, including the commentary of Shankara, focuses on non-dualism (advaita). The title in IAST is: Īśāvāsya Upaniṣad, Śaṅkara Bhāṣya. In Devanagari: ईशावास्य उपनिषद्, शङ्कर भाष्य This English translation includes original Sanskrit text and the transliterated roman text in IAST format. E Human Body A Temple https://www.surya-world.org/hindu-temple-and-the-structure-of-human-body-comparison/ Garba-griham (main sanctum) is equated with human head; antarala (vestibule) is equated with human neck; ardha – mandapam (half-hall) is compared with human chest; maha – mandapam (main hall) is equated with the stomach; flag-post is viewed along with human male organ;and gopuram or temple gateway tower is viewed along with human feet. F From Mainstream Weekly http://mainstreamweekly.net/article11543.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MainstreamWeekly+%28Mainstream+Weekly%29 Excerpts : "The term ‘Development’ is a catchword in the neo-liberal paradigm of governance. Multiple forms of violence have been inflicted on the people, particularly those belonging to the subaltern social classes/groups, in the name of ‘Development’. In the early 1990s, a book titled The Development Dictionary: A guide to Knowledge as Power was published under the editorship of Wolfgang Sachs. Very recently, a new book bearing the title Pluriverse: A Post-Development Dictionary has been published under the editorship of Ashish Kothari, Ariel Salleh, Arturo Escobar, Federico Demaria and Alberto Acosta. (Tulika Books, 2019) In his Foreword to the new book, Wolfgang Sachs recollected what was argued in the introduction of his edited book in 1993: “The idea of development stands like a ruin in the intellectual landscape”. He also made the following seminal observation in his Foreword to the new book (2019): The downfall of the development idea is now obvious in the UN Agenda 2030 programme for Sustainable Development Goals (SDGs)...Indeed, the discourse of development held a monumental historical promise: that in the end, all societies would close the gap with the rich and partake in the fruits of industrial civilization. That era is over: everyday life is more often about survival now, not progress. While the politics of fighting poverty has been successful in some places, it has been bought at the price of even larger inequalities elsewhere; and at the price of irreparable environmental damage. G Quotes about Ancient Indian Prayers https://chaplaincyinstitute.org/portfolio-items/20-quotes-from-the-ancient-scriptures-of-hinduism/ Like : The human body is the temple of God. One who kindles the light of awareness within gets true light. The sacred flame of your inner shrine is constantly bright. The experience of unity is the fulfillment of human endeavors. The mysteries of life are revealed. (Rig Veda*) * The text is layered consisting of the Samhita, Brahmanas, Aranyakas and Upanishads.[note 3] The Rigveda Samhita is the core text, and is a collection of 10 books (maṇḍalas) with 1,028 hymns (sūktas) in about 10,600 verses (called ṛc, eponymous of the name Rigveda). In the eight books – Books 2 through 9 – that were composed the earliest, the hymns predominantly discuss cosmology and praise deities. The more recent books (Books 1 and 10) in part also deal with philosophical or speculative questions, virtues such as dana (charity) in society,[18] questions about the origin of the universe and the nature of the divine, and other metaphysical issues in their hymns. H (a) Satsangam continued... *ANGER* - Present sir *EGO* - Present sir *STRUGGLE* - Present sir *ENVY* - Present sir *REGRET* - Present sir *ANXIETY* - Present sir *BOREDOM* - Present sir *DESIRES* - Present sir *KILLED DESIRES* - Present sir *FRUSTRATION* - Present sir *IRRITATION* - Present sir *MONTHLY EMI* - Present sir *OFFICE TENSION* - Present sir *FUTURE TENSION* - Present sir *TROUBLE* - Present sir *HURDLES* - Present sir *WORRIES* - Present sir *PROBLEMS* - Present sir *UNCERTAINTIES* - Present sir *CRITICISM* - Present sir *GREED* - Present sir *ARROGANCE* - Present sir *HALF KNOWLEDGE* - Present sir *HAPPINESS* - ??? ( *Silence* ) *HAPPINESS* - *?* *?* *?* *HAPPINESS* - Absent sir *PEACE OF MIND* - Absent sir *CONTENTMENT* - Absent sir *FULL KNOWLEDGE* - Absent sir *WISDOM* - On the way Sir *LOVE* - Sleeping sir *HOPE* - Leaving sir *PATIENCE* - Lost sir *GENEROSITY* - Lost sir *HONESTY* - Lost Sir *GRATITUDE* - No where *TRUST* - -Lost sir *LOYALTY* - Lost sir Headmaster Why only NEGATIVE Qualities are Present and POSITIVE ones are Absent ? *CLASS TEACHER:* - " Because purpose of Life remains absent for ever! Sooner it is decided, thorns on the path becomes petals of roses on the way. " *Life is very simple to live, but many make it difficult to be simple*! *TAKE* *IT* *EASY* *MAKE* *IT* *EASY* Have a fabulous Life! I Words from Hitler : BESIDES HIS NEGATIVE ACTION...TARNISHING HIS IDENTITY COMMUNICATION SKILL, DETERMINATION, AIMING BIG GOALS, POWER OF INFLUENCE, RELATIONSHIP MANAGEMENT, TEAM MANAGEMENT..... " *_The_* *_Amount_* *_of_* *_Money_* *_that's_* *in* *your* *_Bank_* *_at_* *_the_* *_Time_* *_of_* *_Death_* , *_is_* *_the_* *_Extra_* *_Work_* *_you_* *_Did_* *_Which_* *_was_* *_not_* *_necessary_* *_at_* *_all_* " WHAT WE ARE, HAVE TO BE CHANGED SEEING PEOPLE WHOM WE WORSHIP.... WITH GOOD ETHICS AND IN BUILT CHARACTER!!! V T Panchapagesan. (b) 1) Continued from C I took that opportunity to tell him about the cow being the only animal both inhaling and exhaling oxygen. He laughed and said that it was a matter of heated discussion among Indians there. Some even said that such an opinion, coming as it did from the judiciary, had put the Indian community to shame. Of course, there were some inclined to agree as the cow, being a sacred animal(Gomaathaa), is likely to possess extraordinary qualities. Who knows! Senan, most people take things for granted. It is a universal trait. I shall give you a good example for that. During the first world war, blackouts were imposed on London as a safeguard against German bombing. For Londoners, it was a noval experience. It was during these blackouts that they saw the night sky. The frequent occurrences of meteorites burning, the phenomenon called 'shooting stars', were new to them. Many were alarmed and started running to the nearest police station to report that enemy planes were approaching to bomb London! This total lack of inquisitiveness is a serious impediment to what we call 'scientific temper' and what is insisted upon in our Constitution. We, Indians, attach a lot of importance to the spiritual motto : 'Know thyself'. We have ,as it were, built up a magnificent intellectual edifice on that. But think how many of us have bothered, for instance, to know why we must inhale oxygen in order to be alive and what comes out from the body through the nose is always carbon dioxide and not oxygen? It is such a simple question, but very vital. Tell me frankly, Senan. Have you thought about it?" "No, Sekhar. I admit that I haven't thought about it." "There is an allied question. The human heart starts beating when the child is inside the mother's womb and the beating continues without a moment's rest until death takes place. For beating thus, the organ needs energy and where does it come from? The answer is the energy is continuously supplied by the cells in that organ. The food that we eat is changed into glucose which, along with the oxygen we breathe in, is carried inside every cell by the blood stream. A chemical reaction takes place inside the cell between oxygen and glucose which results in the formation of an organic compound called adenosine triphosphate, carbon dioxide and water. Carbon dioxide and water get out of the cell into the blood stream and the former eventually goes out of the body through the nose. What is retained in the cell is adenosine triphosphate, simply called ATP. This organic compound consists of the atoms of carbon, hydrogen, nitrogen,oxygen and phosphorus. The name itself indicates that there are three parts of phosphate in it. When energy is needed, ATP sheds one part of phosphate and releases a good amount of chemical energy and becomes adenosine diphosphate or ADP. I have only given the bare facts. This is what happens in all living things. Without ATP, one cannot wink, smile, shake hands or embrace. In plants, it is somewhat different. During the process of photosynthesis, ADP is converted into ATP with the help of sunlight." " Now I understand why oxygen and food are essential for life and only carbon dioxide can come out and not oxygen", said I. "This bare knowledge itself can help to avoid unwanted declarations. Vasanthi, the great, has come. I am passing on the mobile to her. Hope Sumukhi and you have an hour to spare." 2) Continued from B Economic Survey 2016-17 bases its argument supporting establishment of a Public Asset Rehabilitation Agency ( PARA, now loosely referred to as ‘Bad Bank’ in common parlor) on the following grounds: 1. It’s not just about banks, it’s a lot about companies. So far, public discussion of the bad loan problem has focused on bank capital, as if the main obstacle to resolving TBS was finding the funds needed by the public sector banks. But securing funding is actually the easiest part, as the cost is small relative to the resources the government commands. Far more problematic is finding a way to resolve the bad debts in the first place. 2. It is an economic problem, not a morality play. Without doubt, there are cases where debt repayment problems have been caused by diversion of funds. But the vast bulk of the problem has been caused by unexpected changes in the economic environment: timetables, exchange rates, and growth rate assumptions going wrong. 3. The stressed debt is heavily concentrated in large companies. Concentration creates an opportunity, because TBS could be overcome by solving a relatively small number of cases. But it presents an even bigger challenge, because large cases are inherently difficult to resolve. 4. Many of these companies are unviable at current levels of debt requiring debt write-downs in many cases. Cash flows in the large stressed companies have been deteriorating over the past few years, to the point where debt reductions of more than 50 percent will often be needed to restore viability. The only alternative would be to convert debt to equity, take over the companies, and then sell them at a loss. 5. Banks are finding it difficult to resolve these cases, despite a proliferation of schemes to help them. Among other issues, they face severe coordination problems, since large debtors have many creditors, with different interests. If PSU banks grant large debt reductions, this could attract the attention of the investigative agencies. But taking over large companies will be politically difficult, as well. 6. Delay is costly. Since banks can’t resolve the big cases, they have simply refinanced the debtors, effectively “kicking the problems down the road”. But this is costly for the government, because it means the bad debts keep rising, increasing the ultimate recapitalization bill for the government and the associated political difficulties. Delay is also costly for the economy, because impaired banks are scaling back their credit, while stressed companies are cutting their investments. 7. Progress may require a PARA. Private Asset Reconstruction Companies (ARCs) haven’t proved any more successful than banks in resolving bad debts. But international experience shows that a professionally run central agency with government backing – while not without its own difficulties -- can overcome the difficulties that have impeded progress. The observations “Like all financial firms, central banks hold capital to provide a buffer against the risks they take…. Measuring these risks and calculating how much buffer should be provided against them is difficult. For that reason, central bank capital holdings vary widely. RBI is an outlier (in shareholder equity to assets ratio) with an equity share of about 32 per cent, second only to Norway and well above that of the US Federal Reserve Bank and the Bank of England, whose ratios are less than 2 per cent. If the RBI were to move even to the median of the sample (16 per cent), this would free up a substantial amount of capital to be deployed for recapitalizing the PSBs,” contained in the Economic Survey 2015-16 was contested on grounds of accuracy of facts and the then RBI Governor Dr Raghuram Rajan had offered to guide those who wrote Economic Survey to understand RBI Balance Sheet (Dr Rajan kept his word and did exactly what he promised, in a speech he delivered in Delhi the day before he completed his three year tenure as RBI Governor and returned to academia. ) Suffice to say, those who are aware of the interlink between RBI’s balance sheet and GOI finances are not in favour of using the RBI’s capital and reserves to fund the non-performing assets (NPAs) of public sector banks. Budget 2017-18 Finance Minister Arun Jaitley in his Budget speech made the following observations: “The focus on resolution of stressed legacy accounts of Banks continues. The legal framework has been strengthened to facilitate resolution, through the enactment of the Insolvency and Bankruptcy Code and the amendments to the SARFAESI and Debt Recovery Tribunal Acts. In line with the ‘Indradhanush’ roadmap, I have provided ` 10,000 crores for recapitalisation of Banks in 2017-18. Additional allocation will be provided, as may be required. Listing and trading of Security Receipts issued by a securitization company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows into the securitization industry and will particularly be helpful to deal with bank NPAs.” FM doesn’t look keen on taking forward the Economic Survey ideas about managing stressed assets so soon. In a post-budget interview, he said a bad bank is a potential solution but it cannot be supported by the government alone. He also said that he won’t be able to comment on what solution will eventually emerge. Possibly Jaitley has in view the impact of bad bank funding on macroeconomic stability. The finance minister has committed to a fiscally balanced budget with a fiscal deficit target of 3.2% for 2017-18, government-debt-to-gross domestic product (GDP) target of 60% by 2023 and net market borrowing target of Rs3.5 trillion in 2017-18. These commitments do not account for bad bank funding. The creation of a bad bank will put pressure on government finances at least initially. Even if the government funds only 20% of stressed assets in the banking system, it would have a heavy impact on the net market borrowing target in 2017-18. This will adversely affect achieving committed targets for fiscal deficit and government-debt-to-GDP ratio. On March 15, 2017, addressing the first meeting of the Consultative Committee constituted by the Reserve Bank of India, attached to the Ministry of Finance, FM Jaitley said that dealing with NPAs was a challenging task. According to him the he core problem of NPAs was with very large corporates, though few in numbers, predominantly in the steel, power, infrastructure and textile sectors. On the issue of setting up a ‘bad bank’, Jaitley said that several possible alternatives exist and the issue is being debated on public platforms. The government was also considering setting up more Oversight Committees that would look into cases referred to it by different banks. Reserve Bank’s perception Speech delivered by RBI Deputy Governor Viral Acharya at the Indian Banks’ Association Banking Technology Conference held in Mumbai, on February 21, 2017 would guide us on the present thinking within RBI about handling stressed assets of banking system. Viral Acharya said there is a “sense of urgency” to decisively resolve Indian banks’ stressed assets. One of his proposed solutions is the creation of a Private Asset Management Company (PAMC) for sectors in which assets are economically unviable in the short-to-medium term, like the power sector. Acharya feels, this plan would be suitable for sectors where the stress is such that assets are likely to have economic value in the short run, with moderate levels of debt forgiveness. Let us not institutionalize a bad idea The bad bank idea, which was mooted last year didn’t find favour with the then RBI governor Raguram Rajan. The change of guard at Mint Road together with the compulsions arising from the severity of the bad loan problem plaguing the system, which has not so far been responding much to normal ‘treatment’, helped media and analysts to make a second attempt. Theoretically, a bad bank or an asset management company could be set up with government money to buy non-performing assets from banks. By transferring dead loans to the bad bank, banks become free of providing for these loans and making efforts to recover whatever is left recoverable. This would also free up precious capital which could then be used to boost credit flow to industry. But, banks with huge amount of stressed assets are also big enough to do whatever a newly constituted institution can do to make them perform or close the accounts after recovery of whatever part is recoverable. With appropriate legislative and legal support from GOI in the same manner banks form consortiums to lend to large projects banks can make joint efforts to pool resources and make joint recovery efforts. Such joint efforts will reduce the chances of borrowers shifting from one bank to another for softer treatment in regard to financial discipline. Any proposal to institutionalize stressed assets raise questions like, who will pay for the potential losses? If banks are willing to sell loans at a haircut, wouldn’t it make more sense to allow asset reconstruction firms, which have the required expertise in this area, to be major players? Like the disinclination to repay unleashed by agricultural loan waivers, the very concept of a GOI-owned “bad bank” does create the problem of moral hazard as it creates incentives for banks to be reckless. The responsibility to recover or ‘provide for’ loans disbursed going bad should remain with the lender. Shifting this responsibility to another institution and funding the losses from taxpayers’ money raises the more serious question of public perception and potential damage to the government’s reputation. *****************************************


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