The Chairman of SBI has raised a question for debate as to why cash reserve ratio (CRR) cannot be phased out as it does not carry interest.
Instead of having a healthy discussion on the statement, the remark of the Deputy Governor of RBI “either comply or do business elsewhere” is unfortunate.
The RBI would do better to revisit its policy on CRR.
Mariappan
Madurai
Outdated instrument
This is with reference to “Chakrabarty frowns at SBI chief’s views on CRR phase-out” (Business Line, August 28).
It is unfortunate that a man of Chakrabarty’s stature made the remark. Many experts have opined that CRR has outlived its purpose. Most of the central banks have stopped using this instrument.Valuable capital is being immobilised by the RBI using an outdated instrument.
The public has a right to know the logic behind Chakrabarty’s statement.
Vishnumurthy Adiga
Bangalore
In the name of NPA
Crores of rupees are being written off in several banks in the guise of non-recovery. The NPA accounts of other banks are taken over. Subsequently, these accounts are classified as NPA and written off.
Some of these accounts are compromised paying paltry sums. Is the RBI willing to publish the quantum of such written-off accounts for the last five years?
M T Thomas
Mulakulam South.
Keywords: RBI policy on CRR
Comments:
Healthy debates are welcome if the issue mandates it not otherwise. RBI Dy. Chairman is well within his jurisdiction to dismiss such demands. Tomorrow another bank executive may stand up and say that home loan EMI's should be fully tax deductible with no upper limits. Do you expect the Finance Minister to engage in a "healthy debate" on media primetime on such an issue? Or are you going to say that taxation issues are above debate?
Already with Fractional reserve banking,bankers are 'creating money out of thin air',as the saying goes,CRR should be raised or the fraud, FRB banned.
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