 "Uncertainty in garment sector amid Bangladesh crisis, normalcy soon: FM")
Union Finance Minister Nirmala Sitharaman on Saturday said that the garment and knitted fabric sector in Bangladesh was facing a “bit of uncertainty” but expressed hope that the country’s interim government would resolve the situation soon and protect India’s investments in the country.
“I have held discussions on our textile garment investments in Bangladesh, many of which are from Tamil Nadu. The investments went there in good faith and they did well having gone there. Exports from Bangladesh had also increased,” Sitharaman said while addressing the post-budget press meet with the Reserve Bank of India (RBI) Governor Shaktikanta Das in New Delhi.
“I hope that the investments are all safe... it’s too early for me to see what kind of an impact this situation in Bangladesh will have on our economy. I hope that the interim government will settle things sooner rather than later so that both the people of Bangladesh and India can get back to normalcy,” she added.
During the briefing, the finance minister also urged banks to devise innovative and appealing schemes to boost deposit mobilisation.
Speaking after the Reserve Bank of India’s board meeting, FM Sitharaman said that deposits and lending are like two wheels of a cart, with deposits currently lagging behind.
The minister voiced her concern on the sluggish growth in deposit collections, observing that small investors are turning to alternatives like the stock market. She urged banks to enhance the appeal of deposit accounts and bridge the gap between deposits and loans. Additionally, she emphasised the need for banks to concentrate on core activities, including mobilising deposits and providing credit to those who require financial support.
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On his part, governor Das said that interest rates were deregulated.
“Banks are free to decide on interest rates,” Das said.
The RBI governor, while unveiling the bi-monthly monetary policy earlier in the week, had expressed concern about deposit-lending mismatch in the banking sector.
Das had said that banks were taking greater recourse to short-term non-retail deposits and other instruments of liability to meet the incremental credit demand.
This, he warned, “May potentially expose the banking system to structural liquidity issues. Banks may, therefore, focus more on mobilisation of household financial savings through innovative products and service offerings and by leveraging fully on their vast branch network.”
Meanwhile, FM Sitharaman distanced the government from the Economic Survey’s idea of excluding food from inflation targeting.