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Finance Minister P Chidambaram is likely to meet FIIs in Mumbai tomorrow in a bid to allay apprehensions about India's current economic situation and appraise them of steps taken to boost growth and stabilise the rupee.
The Minister, according to officials, will also be updating the FIIs about decisions taken by the government and the RBI to arrest the value of rupee which had touched the lifetime low of 65.56 to a dollar yesterday.
Besides the Minister, Economic Affairs Secretary Arvind Mayaram and Additional Secretary (Capital Markets) K P Krishnan
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The minister is also scheduled to meet bankers.
These meetings assumes significance in backdrop of the volatility on the stock and foreign exchange markets.
Chidambaram yesterday underlined the need for communicating the decisions of the government in an effective manner to the markets and the stakeholders.
He is likely to reiterate the commitment of the government of not imposing any capital controls or reverse the direction of
capital account convertibility.
Chidambaram during a press conference yesterday had said, "..there is no cause for the panic that seems to have gripped
the currency markets that is feeding into other markets.
"We are confident that stability will return to these markets and we can get on with the task of promoting investment
and growth."
He had also laid emphasis that there was no reason for "excessive or unwarranted pessimism" and said that the recent
liquidity control measures taken by the Reserve Bank to reduce volatility in forex market and quell speculation would be
revisited with return of stability.
The Finance Minister informed the Committee that all public sector banks are following Basel III norms (global capital
adequacy norms) and that "our capital and provisioning requirements are stricter than Basel III norms."
Earlier, members of the Committee made suggestions about recovering dues from wilful and genuine defaulters and how to deal with different NPA cases, according to a statement.
Some members spoke of a softer approach by banks towards genuine defaulters such as farmers and promoters of MSMEs as they are vulnerable to external factors beyond their control.
Members raised the issue of misuse of corporate debt restructuring and downgrading of banks by rating agencies due to
NPAs or other factors.
Members of the Consultative Committee who attended the meeting included Anto P Antony, Rajkumari Ratna Singh, Saugata Roy, N K Singh, Shantaram Naik, Murli S Deora (Permanent Special Invitee).
The meeting was also attended by both Ministers of State for Finance, Namo Narain Meena and Jesudasu Seelam.
