Editor,
Imagine an ancient irrigation system — a network of channels that carried water from places where it was abundant to lands where it was scarce. This simple yet powerful idea allowed agriculture to flourish, enabled humans to settle in one place, and laid the foundation for entire civilisations.
Modern finance works in much the same way. Instead of water, it moves capital. It channels money from those who have more than they currently need to those who need it to build factories, start businesses, buy homes, or fund other ventures. And who makes this possible? Banks and other financial institutions — the intermediaries that keep the system flowing.
When you have excess money, you deposit it in a bank. When you need money, you approach the bank for a loan. The process runs like a well-oiled machine. But, as with the irrigation systems of the past, this service isn’t free. Those who lend their money receive interest, and those who borrow must pay it. The financial system ensures fairness — it prevents lenders from charging exploitatively high interest rates and also avoids paying depositors unreasonably low rates.
The price of capital — the interest rate — is largely decided by the banks, but within a narrow band. Bank A might offer 6 per cent interest on deposits and charge 8 per cent on loans, while Bank B might offer 7 per cent and charge 9 per cent. These rates, however, move up and down in cycles. Why? Because the ultimate direction comes from the country’s central bank and policymakers, who review economic conditions — both domestic and global — before adjusting rates.
When rates rise, depositors benefit because they earn more from fixed deposits and savings accounts. But borrowers feel the pinch as loans become costlier. When rates fall, the reverse happens — borrowers cheer, but savers, especially retirees dependent on interest income, worry about reduced earnings. That’s why headlines about interest rate changes often dominate the news.
For individuals, the impact of interest rates changes with life stages. A young person starting out typically needs capital to buy a home, a car, or household goods. At this stage, lower interest rates are welcome. Later in life, after building up savings, the same person may prefer higher rates to maximise interest income.
Governments, however, face a balancing act. Raising rates can slow borrowing and economic growth, while cutting rates can hurt savers. The guiding compass is usually inflation. When the prices of goods and services rise, interest rates tend to rise too; when prices fall, so do rates. What matters is the real rate of return — the interest rate minus inflation. For example, earning 8 percent interest when inflation is 4 percent means your real return is 4. But earning 12 when inflation is 10 percent leaves you with only a 2 per cent real return.
So, the next time the Reserve Bank of India announces a change in monetary policy, don’t react with undue excitement or worry. Interest rates are part of a slow-moving wheel designed to keep the economy in balance — ensuring that capital flows where it’s needed most, much like the ancient irrigation channels that kept civilisations thriving thousands of years ago.
Yours etc.,
Dipankar Jakharia,
Via email
Merit List Transparency
Editor,
In the previous years the District Selection Committee (DSC), East Khasi Hills normally declares the final results of examinations for various posts by publishing the names of candidates in order of merit. However, this year, it is unusual that the DSC decided to publish only the Roll Nos of the persons selected in the Final Merit List. The Final merit list being a very important document/record, as it is used to determine the seniority of persons selected for the post as specified in the service rules, the absence of names in the list is very concerning. Although the conduct of examinations and interviews has been conducted in a very professional manner, the last stage of the process, which is the declaration of selected persons, appears to lack transparency. The DSC is requested to take note of this matter and consider publishing the names of selected persons in future.
Yours etc.,
Name withheld on request,
Via email
Smart ID Cards and uninvited entry
Editor,
Recently I was invited to a high profile meeting in one of the 5 Star Hotels in Guwahati. I started early from Shillong because of the scare of being held up in a traffic jam along the GS Road. Hence I arrived at the venue earlier than expected. I proceeded to the reception area where my bona-fides as an invitee were confirmed through a Biometric Smart Card than through an invitation card. The organizers had asked for my biometric details days ahead of the meet, which I had submitted, and hence my possession of such a card.
I was the first guest to arrive so I had time to waste and apparently so did the two receptionists. They offered me coffee and we started talking. Curious, I asked them what it was with the Biometric ID Cards? Why didn’t the organizers simply depend on the usual ordinary cardboard invitation cards as was done before? Or easier through WhatsApp or email ID? The answer they gave was something that really impressed me. I’ll try to reproduce it below for the benefit of the reader.
The receptionists said, “You see Sir, last meeting we held, a lot of uninvited hecklers also managed to get in and disturb the meet. It was a clear security breach. This time we decided that a stronger and more stringent invitation mechanism was required for better identification of invitees. Hence the Biometric ID “Smart Cards.” In today’s digital world , especially with AI generating capabilities anyone with a computer and printer can produce any document, with all the required letterheads, logo, seals and signatures. No one will know the duplicate from the original. Paper based invitations are a Victorian concept. Totally outdated. Today, where ID is concerned, Biometric Smart Cards are the only way to prevent entry of fraudsters. This is the 21st century system of checking unwelcome guests.” Well it was something I thought I had to share with the people of my state – Meghalaya.
Yours etc.,
Toki Blah,
Via email
Pakistan’s Nuclear Threat to India
Editor,
According to the news “Pak Army chief issues nuclear threat to India during US trip” (ST August 12, 2025), the fact that the threat was made from U.S. soil is seen as a breach of diplomatic norms and an embarrassment for Washington. This could strain U.S. – India relations if not addressed decisively by American officials. The threat reinforces doubts about Pakistan’s civilian oversight of nuclear weapons. It also suggests that the military, not elected officials, control strategic decisions. It raises alarms about potential nuclear access by non-state actors, given the military’s ties to extremist groups. It also sets a dangerous precedent by issuing nuclear threats from a third country. This could prompt international scrutiny of Pakistan’s nuclear doctrine and trigger calls for sanctions or diplomatic isolation if threats persist.
Yours etc;
VK Lyngdoh
Via Email