13 July, 2014 22:58 IST
News
No short cut to reduction in key policy rates: Chakrabarty
Source: IRIS (21-NOV-12)
Comments  |  Post Comment

Reserve Bank of India (RBI) will be extremely cautious in reducing the interest rates as Global economic crisis are due to low interest rates and should not result in collapse of the financial sector said K.C. Chakrabarty, deputy governor RBI addressing the summit organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Chakrabarty stressed for need to create capacity building, the lower interest rates not going to help the growth of the country. He also said that banks can bring down the NPAs and reduce the interest rates.

While addressing the ASSOCHAM conference on 8th Annual Banking Summit Chakrabarty said the manufacturing sector plays a major role. They have to produce goods of world quality at competitive prices. The corporates have failed to create global brands as there has been lack of technology absorption in almost all important segments of the economy.

''Any infrastructure built needs to be adequately priced so as to recover the cost. Money is not the main problem; the real problem is the utilisation and maintenance of infrastructure'', said Chakrabarty.

He also added that the 2G- growth with governance has assumed an importance due to the moderating growth. He urged upon all stakeholders that they must improve governance at all levels. Country is passing through a most critical time and therefore maintains austerity at all levels like government, private and individuals.

He also said that if society needs to survive, we must go by 8% to 10% growth by next 20 years. Core inflation must be reduced to 1% which will reduce down the cost of borrowings and expand the manufacturing sector.

''Agriculture is contributing only 15% of the GDP employing 70% people. Banks must help SMEs and also agriculture sector be mechanised. So that larger resources are available for the commercial purposes'', said Chakrabarty.

Banks must reduce the credit rates for SMEs, agricultural and retail. He also added that banks in India have not taken adequate risk and this is must for the survival of the banks to become healthy, citing the need for Basel III capital requirements.

ASSOCHAM and Yes bank jointly released a special publication on ''Banking India's growth story'' disclosed that the regulator could incentivised banks by lowering reserves requirements (CRR and SLR) for rural and semi-urban branch deposits, so as to increase average population coverage by a commercial bank branch''.

Rajkumar Dhoot, MP and president ASSOCHAM said that banks need to balance business objective between stakeholder’s expectations and risk management. 


News
Continue to like Infosys on inexpensive valuations: Emkay - 11-Jul-2014 17:52
Infosys Q1 margin beat but revenue still subpar; maintain 'Accumulate': MSFL - 11-Jul-2014 17:35
ICICIdirect continues to maintain positive stance on Bata India - 11-Jul-2014 17:07
Surging iron ore prices in India is matter of grave concern: Seshagiri Rao - 11-Jul-2014 15:13
Shiva Cement gets BIS license for PPC - 11-Jul-2014 14:15
Infosys Q1 beats forecast; recommends 'Buy': Angel Broking - 11-Jul-2014 11:35
Infosys Q1 beats estimate; profit climbs 21.6% - 11-Jul-2014 09:34
No custom duty on LCD, LED is good for industry: Tarun Katial, Reliance Broadcast Network - 10-Jul-2014 20:16
Budget offers no incentives for pharma industry: Ramesh Swaminathan, Lupin - 10-Jul-2014 20:09
Increase in rate of royalties for minerals disappointing: TV Narendran, Tata Steel - 10-Jul-2014 20:02
FM fails to notice NBFC sector in this Budget: Hemant Kanoria, Srei Infra Fin - 10-Jul-2014 19:52
more...
* Q - Quote , N - News , C - Chart , F - Financials
Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type   nkg8zc into this box
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Forums  |   E-mail  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer