Apropos of the news story “Governor raps banks for credit crunch” (THT, January 3, Page 11), the governor’s assurance to the public not to panic comes as a big relief.

However, NRB cannot afford to take its hawk eyes off the private banks and their activities lest they torpedo the financial stability of the country through their feral speculative “investment” on land, housing and share purchase. Nepal Rastra Bank has time and again asked the bankers to stay away from non-productive sectors. But they never listen to sane advice, do they?

As they have ignored such directives with utter disdain and contempt, NRB must tell the banks to lend to the non-productive sectors at their own individual risk. It would be good if NRB can reiterate a complete list of risky non-productive sectors that the banks must avoid or indulge at their own peril. The yawning gap between interest rates on deposits and loans must also be narrowed down to a level that will stimulate growth.

They cannot have a gap of 10 percent or more interest rates on deposits and loans, an act tantamount to financial banditry and not consistent with banking business. The NRB must be able curb such malpractice by introducing tough rules liable to punishment. In order to discourage banks and public from profiting from ‘organized and syndicated’ land and real estate speculations, the government must come up with VAT and capital gain tax on all recurrent land and house transactions, especially on those that are repeatedly resold within a period of a decade of the first transaction.

To sum up, all land and houses that change hands within 10 years must be subject to VAT and capital gain tax each time they change hands or ownership. This might wean traders off land and house trade.

Manohar Shrestha, Kathmandu

Tragedy

It is shocking that at least 14 people were killed in a fire accident at a pub in Mumbai. Given the factors like hectic lifestyle, population and congestion, Mumbai is always prone to accidents and tragedies.

India’s financial capital is facing a lot of issues like poor infrastructure, official apathy and corruption. The people in Mumbai are in a fast-paced world and they are accustomed to the unattended issues. The previous foot-overbridge tragedy in Mumbai is still fresh in mind. The fact is that Mumbai is more of “Occidental Culture” than Indian culture.

Incidentally, a similar fire accident has been now reported from New York. True, the business activities, the large number of corporate companies, the showbiz world and the growing population are all adding zing to Mumbai. But at the same time, the basic things should be protected.

P Senthil Saravana Durai, Mumbai