The Reserve Bank of India Deputy Governor, K. C. Chakrabarty, came down heavily on State Bank of India Chairman Pratip Chaudhuri’s views seeking the phase out of the cash reserve ratio (CRR), saying either comply or do business elsewhere.
Responding to a question, on the sidelines of a financial conference on systemic risk organised here on Monday by the Great Lakes Institute of Management, Chakrabarty said banks must work within the framework prescribed by the regulator. “If the SBI Chairman is not able to do the business in this regulatory environment, he has to find out some other place,” he said.
CRR is the percentage of deposits commercial banks keep with the central bank.
Pratip Chaudhuri recently said that CRR does not help anybody. “When CRR is not applicable to insurance companies, non-banking finance companies and mutual funds that also mobilise funds from the public, it is an unfair imposition on banks,” he said to make a point that the CRR adds to the cost of doing business for banks.