Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
27 February, 2015 20:48 IST
CRR cut may not be sufficient to meet deficit in festival season: Shyam Srinivasan
Source: IRIS | 30 Oct, 2012, 04.26PM
Comments  |  Post Comment

India's central bank has decided not to give in to growing political pressure to cut lending rate that caused slowdown in growth. The Reserve Bank of India (RBI) slashed cash reserve ratio (CRR) by 25 bps while leaving lending and borrowing rates unchanged in the second quarter monetary policy review. With 25 bps cut, the revised CRR stands at 4.25%, which will pump Rs 175 billion as additional liquidity in the banking system. The repo and reverse repo rates continue to stands at 8% and 7% respectively.

Commenting on the RBI policy, Shyam Srinivasan, managing director & CEO, Federal Bank, ''CRR cut of 25 bps would release Rs 175 billion in the system. Even if deployed at average 10% or so, would add Rs 17.50 billion annual to the bottom line of the banking system. Being festival season, the currency with public will increase and this cut may not be sufficient to meet the deficit. One can expect OMO buying of G-Secs also in the near future."

''Bank financing for buying gold has been banned. It s a very progressive move and would help preventing the bubble formation. Else, it could have resulted in bank loans being used to buy an unproductive asset, which again could have been pawned to raise further resources to buy more gold and so on. Increase in provisioning for restructured assets by 75 bps would help banks to build a chest for prospective slippages,'' he added.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
Tata Motors announces initiatives for enhancing competitiveness - 27-Feb-2015 18:45
Karnataka Bank signs MoU with Intech - 27-Feb-2015 17:02
Budget to give special emphasis on renewable energy: Tulsi Tanti - 27-Feb-2015 16:42
RCap receives entire sales proceeds of Rs 6.57 bn from Nippon Life Insurance - 27-Feb-2015 14:43
Nitesh Estates signs new residential project worth Rs 3.75 bn - 27-Feb-2015 13:53
Sadbhav Engineering emerges as successful bidder for NHAI project - 27-Feb-2015 12:04
MoD selects BEL-Rolta consortium as development agency - 27-Feb-2015 11:40
MoD selects BEL-Rolta consortium as development agency - 27-Feb-2015 11:40
Minda Industries enters into JV with Kosei Group - 27-Feb-2015 09:21
85% of enterprises say cloud has lived up to hype: Tata Comm - 26-Feb-2015 12:22
Cabinet approves 15000 MW solar projects by NTPC - 26-Feb-2015 11:15
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer