This refers to ‘Bank health check beyond CD ratio’ (February16). The credit-deposit (CD) ratio alone cannot be treated as a reliable health check of banks. While it reflects the proportion of deposits deployed as loans, it does not capture liquidity resilience and other vital parameters. Going forward, deposit mobilisation is set to become increasingly challenging as banks face stiff competition from mutual funds and the bond market. Since now risk-based deposit insurance premium norms are introduced by RBI, banks with higher risk profiles may face increased insurance costs. Although these premiums are paid by banks and not directly charged to depositors, competitive pressures could influence pricing strategies and margins.

In this evolving landscape, it is time to seriously consider abolishing the Cash Reserve Ratio (CRR) as it locks up a portion of deposits without earning returns, thereby constraining banks’ lending capacity and competitiveness.

Srinivasan Velamur

Chennai

Monitor riskier assets

Apropos ‘InvIT with care’ (February 16), the editorial rightly underlines the need to keep investor interest at the centre of reforms relating to REITs and InvITs. While easing norms may deepen the market and improve liquidity, the risks from higher leverage and exposure to greenfield projects cannot be ignored. Retail investors, in particular, may not fully appreciate these risks. Regulatory changes should therefore proceed gradually, with clear caps on borrowing and strict disclosure standards. Any expansion into riskier assets must be matched by stronger monitoring and transparent reporting of cash flows.

SM Jeeva

Chennai

Domestic resilience

Apropos ‘New global order and economics’ (February 16), the article raises an important concern about how economics must respond to a fragmented and uncertain world. If the rules-based order is weakening, policy thinking cannot remain anchored in old assumptions of stability and free flows. Yet, a drift towards narrow national interest alone may deepen volatility. What is needed is a balanced approach. Policymakers should strengthen domestic resilience through diversified trade partnerships, robust supply chains and prudent fiscal management.

A Myilsami

Coimbatore

Corrigendum

The Pocket cartoon by Ravikanth published on February 14 was a repeat of the one that appeared on February 6. The error is regretted.

Published on February 16, 2026