My View on "CRR = 900 km metro............."

Manohar Mahajan

It is unfortunate that despite being the head of the largest public sector bank, Shri Choudhuri talks like the accountant of a urban bank which is more interested in making money by lending money regardless of the purpose of the loan and background of the borrower. I fully agree with the views of Dr.T.V.Gopalakrishnan that earlier such executives - who do not have regards for regulatory prescriptions, leave would be better for the banking system. If the amount kept under CRR is also placed at the disposal of banks, it will go the same way as rest of the deposits have been deployed and a part of it would ultimately become NPA or written off. If something happens to the banking system as a spillover effect of international events, where the money would come from to support the banking system. CRR money acts as a cushion, injects liquidity in the banking system as and when it is needed and is an important monetary policy measure. By criticising CRR, Shri Choudhuri ,it seams , is playing more to the gallaries rather than doing any service to the Indian banking system. Perhaps, he may be having some different designs and continue to find fault with RBI’s actions so as to fulfill his ambition. 

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M.G.Warrier

Read this IMF view reported in HBL on February 7:
“..with the Fund estimating that a 10 percentage point reduction in the effective SLR likely lowering the borrowing costs for the private sector by around 100 basis points(BPS), while increasing the borrowing costs for the government by 50 bps over the medium term. IMF contends that reducing the effective SLR by 10 percentage points would reduce foreign borrowing by corporates by around four per cent in the medium term.”
I am leaving it to the readers to guess whose brief IMF is carrying. We will soon hear an echo of whatever is contained in the IMF note from the North Block despite feeble objections raised by Rakesh Mohan and Janak Raj.