This refers to Mitra Kalita’s brilliant column, Ageless Lessons From Big B, Mint, 22 June. The key question facing most old employees in corporate organizations today is not how old or experienced they are, but how “relevant”. Today, one sees even big, old brands making efforts (some successful and others not so successful) to keep themselves relevant to today’s consumer. Sachin Tendulkar is attempting something similar in Indian cricket today, if one cuts through all the unnecessary hype and watches some of his innings of late. Gone are the days when he used to give a fast-paced start to the innings. Today he plays the role of a solid middle-order batsman, and allows younger players like M.S. Dhoni to go hammer-and-tongs at the bowlers.
Mitra Kalita’s article on bridging the gap between young and old (Mint, 22 June) was good, but perhaps the example of Amitabh Bachchan was not. He has been a learner. He has made umpteen mistakes and learnt from almost each of them. And, most importantly, he has changed with the times.
The older lot must learn this lesson from Bachchan. Those who have will always be valued. And those who have not...will have to either learn the lesson, or rue their fate.
It’s high time the fallacy of grey hair is put to rest. Grey hair is a sign of age, not of wisdom. And wisdom is not the prerogative of only the old. You don’t have to be old to be valuable—to family, organization or country.
Apropos to your column The Trap That Banks Set (Mint, 21 June), I seriously disagree with many views of the author.
He contends that banks should decide their benchmark prime lending rates (BPLRs) in a more transparent manner, use transparent market-related benchmarks like treasury bill rates for their lending.
BPLR is decided by each bank based on various factors, viz. sources of capital, loan tenor, permanency in the system, cost of funds etc.
Each bank has a different model of sources of capital and funds, and thus different BPLRs. For example, banks that have huge retail presence have access to cheaper funds compared with banks with limited retail?presence.?So, there can’t be a market-related benchmark which all banks can use for their lending portfolio. It might be a loss making proposition for many.
Some of his views—like “BPLR as a stand-alone concept is flawed”; “The only parameter that seems to be considered while changing BPLR is competitive forces in the market”; “BPLR and new deposit rates would inadvertently be changed such that earnings of the bank are protected…”; and “Floating rates should be reset at predetermined regular intervals and not in an arbitrary manner”—are seriously questioning the basic pricing and lending principles!
Given the dynamic and fast-changing macroeconomic environment, the rates have to be aligned with market movements. Banks are in the lending business and, surely, have to protect their earnings. Floating rates are meant to be changed with market movements. Pre-determined or fixed-interval change will be of no help. When the market rates were lower, banks have lent at rock bottom prices, but with liquidity getting tighter, they are left with no choice but to align their rates with the market, to protect their earnings.
I somewhat agree that the increase in lending rates is quicker and more frequent than increase in deposit rates.
But suggesting that determination of BPLR be made transparent is like asking every manufacturer or service provider to tell the basis of their costing of each product and how they are arriving at their selling price.