New Provisioning Norms of RBI A welcome initiative for a very healthy , Stable and sound banking system.

 Strengthening Credit Discipline through a Precautionary Margin Reserve Framework

The recent regulatory stance of the Reserve Bank of India marks a significant and long-overdue shift towards reinforcing credit discipline and restoring integrity within the banking system. This approach, focused on early recognition of stress, prudent lending, and accountability, has the potential to materially improve the quality of bank balance sheets while aligning borrower behavior with responsible financial conduct.

In this context, it is important to recall that as early as 2004, the book “Management of Non-Performing Advances in Public Sector Banks”,dedicated to the Reserve Bank of India, published by the Indian Institute of Banking and Finance had articulated a structured and forward-looking framework to address the persistent challenge of non-performing assets. The central recommendation was the creation of a Precautionary Margin Reserve, built through small, risk-calibrated contributions from borrowers, supplemented by contributions from banks and, where appropriate, supported within a regulatory framework.

The essence of this proposal lies in shifting from a reactive to a pre-emptive and self-sustaining mechanism for managing credit risk. By linking contributions to borrower risk profiles and credit ratings, such a reserve would:

• Instill stronger credit discipline among borrowers
• Encourage more prudent and accountable lending practices by banks
• Create a dedicated buffer to absorb emerging stress and facilitate timely resolution of bad debts
• Reduce the recurring burden of recapitalization on the exchequer and other stakeholders

Importantly, this approach internalizes the cost of credit risk within the banking ecosystem itself, thereby sparing depositors, taxpayers, and the broader economy from the cyclical impact of mounting NPAs.

The current regulatory environment—characterized by tighter supervision, improved risk assessment frameworks, and emphasis on provisioning—provides an opportune moment to revisit and operationalize this concept. A well-governed Precautionary Margin Reserve Fund, aligned with existing prudential norms and supported by transparent oversight, can serve as a complementary layer to the present provisioning systems.

Had such a mechanism been institutionalized earlier, the magnitude and recurrence of the NPA problem could have been significantly mitigated. Nevertheless, the present shift in regulatory philosophy offers a timely opportunity to adopt a more durable and systemic solution.

A calibrated introduction of this framework—possibly on a pilot basis—would not only strengthen the resilience of bank balance sheets but also contribute to long-term financial stability and sustainable economic growth.

T V G Krishnan.

(Personal Views)

Reframing the Governance of Hospitals particularly Corporate Hospitals in India.

 

 Reframing the Governance of Corporate Hospitals in India

Background

Corporate hospitals have become a significant pillar of India’s healthcare delivery system, contributing to advanced medical infrastructure, specialised care, and medical tourism. However, their operational philosophy has increasingly mirrored that of conventional commercial enterprises, where profit maximisation and cost minimisation dominate decision-making.

While financial sustainability is necessary, applying a purely commercial framework to healthcare risks compromising ethics, patient trust, and equitable access to care. Healthcare is fundamentally distinct from other industries—it deals with human life, dignity, and societal well-being.

Problem Statement

There is growing public concern regarding:

• Over-commercialisation of healthcare services
• Unnecessary diagnostics and procedures driven by revenue targets
• Lack of transparency in billing and pricing
• Financial exploitation during medical emergencies
• Erosion of trust between patients and healthcare providers
• Taxation policy for Health sector should be totally different from all Other Sectors. 

Such trends not only burden individuals financially but also weaken the credibility of the healthcare system as a whole.

Policy Objective

To establish a differentiated governance and regulatory framework for corporate hospitals that ensures:

• Ethical, patient-centric care
• Transparency and accountability
• Financial sustainability aligned with social responsibility
• Restoration of public trust in institutional healthcare .                 

Key policy Recommendations 

 1. Patient-Centric Governance Framework
Mandate that all clinical decisions be based solely on medical necessity. Introduce institutional policies that explicitly prohibit revenue-linked clinical targets.

2. Ethical Standards and Accountability

Develop measurable indicators for compassion, ethical conduct, and patient outcomes. Incorporate these into hospital accreditation, licensing, and periodic evaluations.

3. Transparent and Standardised Pricing

• Enforce clear disclosure of treatment costs
• Standardise pricing for common procedures where feasible
• Require itemised billing with justification for major interventions

4. Independent Regulatory Oversight
Establish or strengthen independent regulatory bodies to:

• Audit hospital practices and billing patterns
• Address patient grievances swiftly
• Publish performance ratings based on ethics, outcomes, and patient satisfaction—not just infrastructure
• Introduce Ombudsman Scheme to redress Complaints of patients. 

5. Balanced Financial Model
Encourage a hybrid model where:

• Profitability supports sustainability and reinvestment
• A defined portion of capacity/services is allocated for affordable care
• Incentives are provided for hospitals demonstrating social responsibility

6. Holistic Healthcare Delivery
Promote expansion beyond curative care to include:

• Preventive healthcare and early diagnosis programs
• Mental health and counselling services
• Patient education and post-treatment support

7. Medical Tourism with Ethical Positioning
Position India as a global destination for value-based healthcare, combining clinical excellence with humane treatment and transparent pricing.

Implementation Approach

• Ministry-led task force with representation from healthcare professionals, economists, ethicists, and patient groups
• Phased regulatory reforms with pilot programs in major metropolitan areas
• Integration with existing accreditation systems and digital health platforms
• Continuous monitoring through publicly accessible dashboards Expected Outcomes

• Improved trust in corporate healthcare institutions
• Reduction in unethical medical practices
• Greater affordability and transparency in healthcare delivery
• Enhanced global reputation of India’s healthcare system
• Alignment of healthcare growth with societal well-being
• Taxation policy needs total review to reduce the cost of treatment , increase the trust in Hospitals and enhance affordability with or without Insurance. 

Conclusion 

Corporate hospitals are not merely business entities—they are custodians of human life. Their governance must reflect this responsibility. A shift from profit-driven healthcare to value-driven healthcare is not just desirable; it is essential for building a just, equitable, and trusted healthcare system in India.

Samastha Loka Sukhino Bhavanthu.

TVG Krishnan

(personal Views)

Legal reform . Make it real, rear, rehabilitate , respect and regard.

 

justice Must Be Seen to Be Done: A Call for Urgent Legal Reforms in India

“It is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done.” — Lord Hewart

The concerned authorities in governance, judiciary, and policy-making must undertake serious and time-bound introspection on how our legal system delivers justice. The issue is not merely about the existence of laws, but about the efficiency, consistency, and credibility of their implementation. Delays in adjudication, procedural complexities, and uneven enforcement continue to act as structural bottlenecks. These not only erode public trust but also directly impede economic growth, discourage investment, and weaken social welfare outcomes.

A qualitative transformation is therefore essential—one that focuses on simplifying procedures, ensuring accountability, leveraging technology, and delivering time-bound justice. Such reforms are not optional; they are critical to eliminating systemic inefficiencies.

India’s legal framework is founded on the noble principles of equity, fairness, and justice for all. The laws enacted are comprehensive and, in intent, designed to protect citizens and ensure uniform application. However, the growing divergence in interpretation and implementation of laws across jurisdictions is steadily eroding public trust.

A widely perceived reality today is that outcomes often depend less on the law and more on the individual involved. This perception—whether fully accurate or not—has serious consequences. It weakens institutional credibility, creates uncertainty, and imposes emotional, social, psychological, and financial strain on citizens.

Legal reform, therefore, is not merely overdue—it is essential for restoring faith in governance and ensuring that economic and social policies achieve their intended outcomes.

Key Areas of Concern

• Lack of uniformity in judicial decisions across courts

• Multiplication of similar cases despite existing precedents

• Judicial delays and mounting backlog

• Scope for discretion leading to inconsistency and perceived bias

• Limited accessibility of prior judgments to all levels of judiciary

• All Institutions should ensure to comply with the laws of the country concerning public welfare and their own delivery of statutory functions in letter and spirit.

Recommendations for Immediate Consideration

1. Establish a National Judicial Precedent System
Create a centralized, digitally accessible repository of judgments across all courts, integrated and searchable in real time. This should be mandatory reference material for all judicial officers to ensure consistency in decision-making.

2. Mandatory Adherence to Precedents
Introduce clear guidelines requiring lower courts to adhere to established precedents in similar cases, with any deviation to be explicitly justified in writing. This will reduce arbitrary interpretation and enhance accountability.

3. Classification and Standardization of Cases
Develop a system of categorizing cases based on subject matter and legal principles, enabling faster identification of applicable precedents and reducing duplication of litigation.

4. Judicial Performance and Accountability Metrics
Implement transparent performance indicators such as case disposal time, adherence to precedents, and quality of judgments. Periodic review mechanisms can help improve efficiency and consistency.

5. Use of Technology and AI Assistance
Leverage technology to assist judges in identifying relevant past rulings, similar case patterns, and legal benchmarks. This can significantly reduce delays and improve the quality of adjudication.

6. Strengthening Legal Awareness and Accessibility
Ensure that citizens, legal practitioners, and lower judiciary have easy access to simplified legal information and landmark rulings to promote informed litigation and reduce unnecessary cases.

7. Discouraging Frivolous and Repetitive Litigation
Introduce stricter measures, including penalties, to prevent filing of cases on issues already conclusively settled by higher courts.

Conclusion

Justice in a democracy cannot afford to be inconsistent or unpredictable. Uniformity in interpretation and application of laws is essential not only for fairness but also for maintaining public confidence in the system. A coherent, transparent, and technology-enabled judicial framework will not only reduce pendency and corruption but also reinforce the credibility of governance.

The time to act is now. Restoring trust in the justice delivery system is not optional—it is fundamental to ensuring that laws serve their true purpose: protecting and empowering every citizen equally.A strong and credible justice system does more than uphold rights; it strengthens the very foundation of the economy by ensuring predictability, fairness, and investor confidence. At the same time, it lays the groundwork for a truly robust and enviable democratic framework—one where governance is transparent, accountability is real, and justice is not delayed or denied.

Viksit Bharat is well within our reach with admirable and enviable justice delivery system by All Institutions, Legal Luminaries and all Individuals . 

Samastha Loka Sukhino Bhavanthu.

T V G krishnan

(personal Views)

Bangalore Traffic &Roads A call for Urgent , Practical Action

 

Reports indicate that over ₹100 crore is being spent daily in Bengaluru (TOI,12th April). Yet, for the average citizen, a basic question remains unanswered: why do potholes, poor roads, and traffic disorder continue unchecked?

A recent hospital visit using a call driver reflected the daily reality. What should have been a simple commute turned stressful and unsafe—especially for senior citizens. Driving today requires not just skill, but constant alertness to bad roads, indiscipline, and unpredictability.

Traffic concerns have become the common starting point of conversations everywhere. This is not inevitable—it is a result of gaps in execution, accountability, and civic discipline.

What Is Going Wrong

• Poor road maintenance and delayed pothole repairs
• Encroachments and illegal parking reducing usable road space
• Inefficient traffic signals and lack of synchronization
• Frequent violations: wrong-side driving, signal jumping, rash behaviour
• Weak and inconsistent enforcement
• Safety norms routinely ignored

A sensitive but important concern is the presence of beggars at traffic signals. While this reflects deeper social issues, it also disrupts traffic flow and creates safety risks. This calls for humane rehabilitation, not unchecked continuation.

The Real Impact

• Loss of time and productivity
• Increased stress and health strain
• Safety risks for all road users
• Growing public frustration and loss of trust

Shared Responsibility: Administration & Public

Administration must:

• Ensure time-bound road repairs and quality maintenance
• Introduce efficient, technology-driven traffic systems
• Enforce rules firmly and consistently
• Clear encroachments and regulate parking

Public must:

• Follow traffic rules and respect lane discipline
• Avoid violations and unsafe driving practices
• Cooperate with enforcement and civic norms

The Core Message

Good roads and disciplined traffic are not luxuries—they are basic necessities. They determine how peacefully, safely, and productively people live.

Citizens seek simple things: dignity, safety, and the ability to move easily to workplaces, hospitals, schools, and public services. Efficient connectivity is central to this.

Time to Act

A well-managed traffic system can resolve many of Bengaluru’s daily stresses.

Can we act now—collectively and decisively—before this becomes an accepted way of life?

Samastha Loka Sukhino Bhavanthu. 

TVG Krishnan

(personal Views)

No one gains but all lose on war. Aim Progress through Cooperation , Not Confrontation.

 Dear Sir,

                        No one gains but all lose on war.  Aim progress through Cooperation , Not Confrontation.

Apropos your editorial Now, for ceasefire to Coagulate to peace (april 9), the whole universe feel happy on the ceasefire announcement. In today’s deeply interconnected world, any national approach focused solely on self-interest, without regard for global understanding and support, risks creating more disruption than progress. True advancement cannot be achieved in isolation; it requires cooperation, mutual respect, and shared responsibility among nations.

Economic imbalances, social consequences, and rapid technological changes demand thoughtful and inclusive responses. Ignoring these realities can lead to instability that affects not just one country, but the global community as a whole.

At a time when people everywhere aspire for development, dignity, and peaceful growth, the use of aggressive rhetoric or the threat of conflict has no place. War and confrontation cannot be solutions—they only deepen divisions and delay progress.

What the world needs today is a cooperative spirit, where dialogue replaces hostility, and collaboration replaces coercion. Nations must work together with patience, understanding, and a firm commitment to non-violence.

Only through such a balanced and peaceful approach can we ensure sustainable progress and a more stable, harmonious world for all.

T V Gopalakrishnan

Bengaluru.

( Letter sent to ET not published ).

Live and Let Live. Let us make the whole Universe Vasudaiva Kutumbakam

 

Live and Let Live. Let us make the whole Universe Vasudaiva Kutumbakam

We often fail to value what Nature gives us freely—space, air, water, light,  Fire and the very energy of life. Instead, we chase comfort, wealth, and power, creating divisions and losing the true joy of living.

Despite hardships like poverty, illness, and injustice, people remain highly optimistic continue to  live with hope and resilience. This itself reflects a deeper strength within humanity. Yet, much of the suffering we see today is man-made—driven by greed, ego, anger, hatred, wars and endless desires of all kinds . History of nations and the the civilisations definitely convince and vouch for the fact that wars and actions in Hatred have brought only destruction of all kinds and have not favoured with any tangible and enduring benefits either to the winners or  to the losers of war. The result is a missed opportunity to enjoy the ecstacy of Life and all its positive thrills. 

While technology advances rapidly, peace and contentment seem to decline. Society remains divided by religion, language, and beliefs, making harmony difficult.

We forget a simple truth: nothing material lasts forever. Nature , the ultimate provider of energy  alone to sustain Life  is eternal.

If we respect Nature, care for one another, and adopt a spirit of “live and let live,” life can become more meaningful and peaceful.Will the Human being having the rational thinking ability show wisdom and maturity to make the world a welfare centre .

The change we seek is not outside—it begins within us.

May Vasudaiva Kutumbakam  be an achievable reality with the grace of almighty . 

 Samastha Loka Sukhino Bhavanthu. 

T V G Krishnan

(personal Views)

Market Theory to tackle inflation.

 Market's own Theory to Tackle Inflation

Economic policy in India is shaped by the Government of India through fiscal measures and by the Reserve Bank of India through monetary policy. These policies aim to promote economic growth, generate and distribute wealth equitably, maintain price stability, and ensure a dignified quality of life for citizens.

In design, these policies are comprehensive and appealing. They reflect the aspirations of policymakers, economists, social reformers, and technocrats alike, supported by data-driven systems intended to ensure transparency, efficiency, and accountability.

However, the challenge lies not in policy formulation, but in implementation.

The Missing Link: Ground Reality

Beyond formal policy frameworks exists a vast and complex informal market system. Administrative inefficiencies, procedural delays, and weak enforcement often distort the intended impact of policies. As a result, the benefits that appear robust in theory frequently become diluted in practice.

This creates a disconnect between:

• Official economic policy, and

• Actual market behaviour

In many cases, policies risk becoming academic exercises, with limited real-world effectiveness.

How Markets Actually Respond to Inflation

At the grassroots level, small vendors, traders, transport operators, and service providers evolve their own mechanisms to cope with rising costs and systemic pressures. These include:

1. Quantity Adjustments

Prices are held constant, but quantities are reduced—smaller portions, fewer add-ons.
This is a subtle and widely accepted form of inflation.

2. Quality Adjustments

Inputs or service quality may be marginally lowered to maintain affordability.

3. Informal Pricing Practices

Prices are determined dynamically, factoring in:

• Input costs

• Unofficial payments

• Customer affordability

These decisions are intuitive, experience-based, and often more agile than formal models.

4. Weights and Measures Flexibility

Slight deviations in quantity are used as a buffer against cost increases. While questionable, such practices are often seen as survival strategies.

5. Embedded Corruption Costs

Informal payments at various stages—production, transport, licensing, and retail—become part of the cost structure. These are indirectly passed on to consumers.

A Parallel Economic Reality

These practices point to the existence of a parallel economic logic—one that operates independently of formal financial systems. The theories and data used by policymakers often fail to capture this layer, making inflation appear more controlled than it actually is at the consumer level.

In effect:

• Formal policy aims to control inflation

• Informal markets adapt to survive

The Larger Concern

While these adaptive practices demonstrate resilience and ingenuity, they also:

• Reduce transparency

• Distort price signals

• Shift hidden costs to consumers

• Undermine trust in systems

Ultimately, both producers and consumers—often from the same socio-economic strata—bear the burden.

The Way Forward

To make inflation control truly effective:

• Incorporate informal sector realities into policy thinking

• Reduce administrative and corruption-related frictions at the grassroots

• Simplify compliance systems to encourage genuine participation

• Strengthen last-mile governance to ensure policy outcomes match intent

Conclusion

There are, in effect, two parallel economies—formal and informal—each with its own methods of managing inflation. While the informal system is adaptive and resilient, it often neutralizes the intended impact of formal policy.

Bridging this gap is essential. Without aligning policy design with ground realities, even the most well-conceived economic strategies risk remaining effective only on paper.

When authorities ignore the sensitivity of public concerns, markets tend to self-correct inflationary pressures in invisible ways. This can create a dangerous illusion of invincibility for policymakers, who may wrongly attribute these adjustments to the effectiveness of their own actions.In the long run, such an illusion of invincibility can prove deeply damaging. When authorities begin to mistake market-driven adjustments for policy success, it breeds complacency, delays necessary interventions, and weakens institutional credibility. The costs of this disconnect are eventually borne by the very people whose concerns were overlooked—often in the form of sharper inflationary shocks, reduced purchasing power, and erosion of trust in governance. It is therefore imperative that policymakers remain continuously sensitive and responsive to public realities, recognising that markets may adapt silently, but they do not absolve authorities of their responsibility to act with foresight, accountability, and empathy.

Loka Samastha Sukhino Bhavanthu. May there be very noble thoughts and actions from all Institutions and Individuals to ensure welfare for all in all respects.

T V G Krishnan

(personal Views).