It is unfortunate that terrorism is again showing its ugly head in the Valley by targeting civilians (page 1, October 8). After making Jammu and Kashmir a Union Territory, the Center seems to be slowing down its initiative to build trust among people and local leaders and develop inclusivity in government programs and policies in the Valley. The all-party meeting with the Prime Minister looked promising, but there seems to be no move after that.
Chennai
The targeted killings of Kashmir’s religious minorities brought back haunting memories of the planned expulsion of Pandits from the Valley in the 1990s. The hidden hand of Pakistan is clearly visible in the killings. What is shocking is the incompetence and unwillingness of India’s political class to condemn the targeting of minorities.
Thiruvananthapuram
I write this as the CEO of the Microfinance Institutions Network (MFIN). While it is good to have a different point of view, the article, “RBI Microfinance Proposals That Are Anti-Poor” (Editorial Page, October 6, 2021) is not entirely factually correct. One thing that stands out is the author’s fear that private financiers will profiteer and interest rates will move north; For example, there is also a wrong example. MFIs charge interest rate on the basis of diminishing principal and the given example is wrong as the interest amount may not be same for 24 months; It will happen every month. NBFC-MFIs (only to which fixed interest rates are applicable) make up a mere 32% of the market share. And the interest rates of major institutions range between 19% and 21%, with cost of funds ~12%. Anyone familiar with finance knows that the interest rate is a function of cost of funds, transaction cost and risk cost are well understood. And NBFC-MFIs in India have the lowest transaction costs compared to globally, while providing doorstep services.
The author fears rate-regulation and rates are rising, apart from the fact that there is only a 32% market cap, the example of banks in India comes to mind. Have rates exceeded the ceiling or really fallen in 1991, including for private banks? There are facts to see. Such things can happen under oligopoly conditions, but not in India, where the microfinance market is highly competitive with around 200 lenders (banks, NBFCs and NBFC-MFIs) supplemented by RBI and SRO oversight. Global research shows that caps only create market inefficiencies and often defeat the policy objective of universal inclusion. For example, in a margin-capped environment, institutions will shy away from remote areas as operating costs rise – those most in need of services. To the point of the author’s “private” and “gain”, the MFI has suffered for three years in the last five years due to external reasons such as COVID-19. It is now well accepted by the Indian policy that any institution (public or private) should be sustainable and not subsidy driven. Both public and private institutions have a role to play in meeting the challenge of exclusion, but permanently.
New Delhi
.