Live
- Second phase randomization of EVMs is complete
- BJP confusing Matua voters though CAA notification: Mamata Banerjee
- IPL 2024: LSG might have to play the rest of the event without Mayank Yadav, says coach Justin Langer
- Two killed after colliding with a parked lorry
- PCB identifies the April 7- May 20 window for PSL 2025; to clash with IPL’s next season
- Viksit Bharat Ambassador event: Sri Sri Ravi Shankar heaps praise on PM Modi for Kashi facelift
- Women’s Hockey League: Haryana, Madhya Pradesh win on Day 5
- Indian Americans caution US university on demand to display 'flag of Kashmir'
- YS Sharmila worried over 'mental state' of brother Jagan
- PM Modi prays at Kanpur gurdwara along with CM Yogi
Just In
x
Highlights
FM says the regulator must understand its mandate In a veiled message to the Reserve Bank, Finance Minister P Chidambaram has hinted that it should...
FM says the regulator must understand its mandate In a veiled message to the Reserve Bank, Finance Minister P Chidambaram has hinted that it should not focus solely on containing inflation but also look at the larger mandate of growth and creation of jobs. "RBI must understand its mandate in a broader sense. Yes, RBI's mandate is price stability, containing inflation and maintaining fiscal stability but that must be understood as part of a larger mandate of growth and creation of jobs," he said replying to a question on what he expected from RBI in the next policy review scheduled July 30. At least a couple of occasions, Chidambaram had not hidden his unhappiness over the hawkish stance adopted by RBI Governor D Subbarao over meagre interest rate cuts. To a question on banks not passing on rate cut benefits to borrowers, Chidambaram said, "We must also hear the side of the bankers. While the case of the consumers, the borrowers is a very strong case, for the bankers also they put equally strong case. It is after hearing them the government would have to advise the public sector banks to take a balanced view". Chidambaram will meet heads of public sector banks to review financial performance of lenders and discuss ways to step up lending activity to boost sagging growth, besides passing on the rate cut benefit to borrowers. To prop up growth, the RBI has reduced the policy rates by 1.25 per cent since January 2012. However, because of liquidity constraints banks have lowered the lending rates by only 0.30 per cent. The agenda for the bankers meeting would include direct benefit transfer, deteriorating asset quality and credit growth. He is also expected to review steps being taken by banks to push stalled infrastructure projects, asset quality and credit inflow to productive sectors. If the banks reduce their lending rates, it would help in pushing up loan growth and economic activity. India Inc has been complaining about the reluctance of banks to pass on the benefit of rate cut to corporates and retail borrowers. May cut CRR, postpone repo cut: Report The Reserve Bank of India may cut cash reserve ratio (CRR) by 0.25 percentage points in its review later this month to revive growth, a report by Bank of America Merrill Lynch said on Tuesday. The report, however, said that the central bank may not reduce its short-term lending rate or repo rate until the rupee stabilises. "The RBI will understandably want to avoid controversy by cutting rates till the INR stabilises. Yet, we retain our 75 basis points (0.75 percentage points) RBI rate cut call for FY14," the report said, adding in its July 30 meet RBI is likely to skip rate cut to avoid any controversy. "We continue to expect the RBI to cut CRR � the mandatory portion of cash banks have to park with RBI -- by 25 basis points, on July 30, to revive growth, if INR volatility prevents it from cutting rates," BofA-ML said. The global brokerage firm believes that CRR cut is likely to help cut lending rates and revive growth sentiments. The rupee last week sank to an all-time low of 60.72 against dollar on heavy capital outflows and month-end dollar demand from importers. The rupee is currently hovering over the 59/$ level. The report said lower rates would actually support the INR "as the $250 billion FII equity portfolio is by far larger than the $30 billion FII debt portfolio". The Reserve Bank in its mid quarter policy review kept the key interest rates unchanged citing elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows. The repo rate at which the RBI lends to the system has been retained at 7.25 per cent, while the cash reserve ratio is at 4 per cent.
Next Story
More Stories
ADVERTISEMENT
© 2024 Hyderabad Media House Limited/The Hans India. All rights reserved. Powered by hocalwire.com