 "Bankers demand interest on CRR")
Indian Banks Association (IBA) today demanded a cut in cash reserve ratio (CRR) and repo rate in pre monetary policy consultations with deputy governors of Reserve Bank of India.
K R Kamath, chairman, IBA and chairman and managing director, Punjab National Bank said, “we have requested that if RBI can give some interest on CRR, it will be most welcome.” RBI will announce its first quarter monetary policy review on 30 July.
“We have said that provisioning that was introduced in the restructuring should be reviewed because there is tremendous pressure on demand for restructuring and banks may find it difficult to make such provisions” Kamath added.
RBI has increased provisioning to 5% from June for fresh restructuring cases.
Bankers also demanded RBI to reduce tenure of foreign currency non resident (FCNR) accounts and non resident external (NRE) deposit accounts from current one year to improve dollar flow in the country.
“We have said that currently the FCNR and NRE deposit – the minimum period is one year. We have requested that if it can be reduced to at least six months, it will help us to bring some more dollars into this country” Kamath said.
RBI in this calendar year has so far reduced repo rate by 75 basis points to 7.25% and CRR by 25 basis points. The banks however are reluctant to pass the cuts in similar margin. Recently however after finance minister P Chidambaram nudged public sector banks (PSB) to cut the rates PSBs have started paring their base rates or the minimum rate at which the bank can lend.
K R Kamath, chairman, IBA and chairman and managing director, Punjab National Bank said, “we have requested that if RBI can give some interest on CRR, it will be most welcome.” RBI will announce its first quarter monetary policy review on 30 July.
“We have said that provisioning that was introduced in the restructuring should be reviewed because there is tremendous pressure on demand for restructuring and banks may find it difficult to make such provisions” Kamath added.
RBI has increased provisioning to 5% from June for fresh restructuring cases.
More From This Section
Bankers also demanded RBI to reduce tenure of foreign currency non resident (FCNR) accounts and non resident external (NRE) deposit accounts from current one year to improve dollar flow in the country.
“We have said that currently the FCNR and NRE deposit – the minimum period is one year. We have requested that if it can be reduced to at least six months, it will help us to bring some more dollars into this country” Kamath said.
RBI in this calendar year has so far reduced repo rate by 75 basis points to 7.25% and CRR by 25 basis points. The banks however are reluctant to pass the cuts in similar margin. Recently however after finance minister P Chidambaram nudged public sector banks (PSB) to cut the rates PSBs have started paring their base rates or the minimum rate at which the bank can lend.