The author has been very forthright in saying that the RBI gave different signals to the market and market being influenced by more of speculative tendencies than the realities and fundamentals of the economy which have been moving from bad to worse,has been projecting reductions both in CRR and Repo rate.Banks and industries always clamour for more concessions and reliefs without going into minute details of their demands and any justification taking into consideration the seriousness of issues faced by the economy.Fortunately,the Reserve Bank kept the policy rates unchanged without giving heed to the FM's directions,markets' expectations,industries'demands and banks appeals.The opaqueness in interest rates needs a serious investigation by the Reserve Bank and the banks'tendency to maintain high NIM without passing on the benefits to genuine and good borrowers has to be controlled The ills of the Economy are not only the problems of the Reserve Bank and all stakeholders have to share.
from: Dr.T.V.Gopalakrishnan
Posted on: Jun 21, 2012 at 21:52 IST
(This is in response to an article appeared in BusinessLine dated 21/06/12)
