The credit policy announced on 3rd February 2015 makes lot of sense this time as it
sounds very positive on the major macro economic fundamentals of the economy like improvements observed in inflation, Current account deficit, forex
reserves, etc. and offers some sensible measures to provide liquidity, maintain
stability of the rupee, mobilize deposits on a long term basis to expand infrastructure
credit without much of a mismatch in the Asset Liability management. However,
RBI has also sounded skeptical on the Fiscal front and prefers to wait for the revised
detailed data on economic Majors on the 9th of this month and the
possible budget proposals to assess the soundness and stability of measures to sustain
the economic growth on a long term basis to take a liberal view of its own monetary policy. Its
approach to dump credit defaulters also sounds sensible and banks should take
full advantage to bring down the NPAs through conversion of debts into equity
and inducting new management in sick companies.
Dr. T.V. Gopalakrishnan
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