Apropos ‘Banks should learn to live with CRR’ (Business Line, October 10), there is certainly some substance to a few bankers asking for either complete abolition of CRR, or as an alternative, payment of interest on CRR deposits. Money held as CRR is dead money. Our Finance Minister has gone on record saying that the RBI should pay interest on CRR up to 7 per cent. Australia, Canada and Sweden do not have any CRR. In the US, it is applicable only on transaction deposits and not on time deposits. Maybe, RBI can think of different CRR rates for different banks, depending upon their lending character.
- V Sasthamani (HBL)
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