There is need to exercise caution on SLR status for corporate bonds

.....After all, the present surplus SLR securities with the banking system alone can generate over Rs 5 lakh crore through open market operations (outright purchase of government bonds by RBI) or through the overnight cash support mechanism through the repurchase window. In implementing the present proposal, the government would only help transfer corporate risks to banks and eventually to itself. In such an eventuality, the government would also effectively loosen its fiscal strings, contradicting its proffered pursuit of fiscal prudence......

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