The article carries the strong defence in favour of not paying intereston CRR balances.SBI's Chairman's observation that CRR is a waste on the economy is something very strange and it only indicates that he cares more about SBI's balance sheet than the Economy's balancesheet which broadly reflects on RBI's balance sheet.The author has explained very well the importance of CRR as a monetary control tool and the need for the Govt to restrain on its fiscal flamboyancy.Strong RBI balance sheet is only a reflection of the weakness of the economy and this needs to be appreciated both by the Govt and the banking system.No doubt the economy should grow and that is the common objective of the Govt, RBI and the banking system.But to ensure growth,the economy needs a strong financial system and sound fiscal policies and RBI as a responsible Central Bank of the country has a role to play taking the interests of the economy and its people.Inflation if brought under control,it will benefit all.
from: Dr.T.V.Gopalakrishnan
Posted on: Nov 16, 2012 at 09:32 IST
(This comment published in BusinessLine is in response to an article Not the Right Time to abolosh CRR appeared in B/Ldt 16/11/12.)
