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.
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Most of the central banks have stopped using this instrument.Valuable capital is being immobilised by the RBI using an outdated instrument.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.
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
Keywords: RBI policy on CRR