CRR = 900 km metro, 25% larger economy
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The CRR, I think, is the biggest national waste. Of the `70 lakh crore in deposits, the Reserve Bank of India (RBI) impounds 4%. That’s `280,000 crore. And then you worry about infrastructure funding! All this money can go for infrastructure funding and all the citizens of India can have a metro. It costs `300 crore to build a km of underground metro. So you could have had 900 kms of metro with that money. Now, how many cities are there in India that need it? 20 cities? 900 km means 45 kms of metro for each of these cities.............
1 comment:
This is typical of a commercial banker always thinking of investment and making profit. He forgets for a moment that if commericial banks are allowed their way, many may not exist to make that investment and profit. So many King fisher like companies would take the hard earned money of small people which are kept as deposits with the banks and vanish from the scene. Mr Choudhari should go back to his own banks, balance sheet and observe that the bad debts written off by the bank and the npas of the bank had been avoided, more metros, more roads and more infrastructure, the economy would have got. If the entire banking system's bad debts write offs and NPAs are avoided by better functioning, the fiscal deficit could have been easily wiped our in one stroke and the economy would be running a surplus. Earlier such bank executives leave the system the better for banks and the financial system to have some semblence of stability and soundness.They are not matured enough to appreciate the efficiency and effectiveness of the regulatory system despite having witnessed the financial turmoil the advanced economies has faced in the year 2008. Such top executives act as a hindrance to transmit the monetary policy mechanism as they never act in letter and spirit as the Reserve Bank as a worldly recognised regulator and promoter of sound banking and financial system desires. This is unfortunte and the governor has not been lucky enough to have the backing and support of major bankers. Even some of his own lieutenants seem to be not in agreement with his way of thinking in policy matters as is made out and reported in media. With all these, the RBI has been a success in maintaining its status as a good regulator and a central bank.
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