Cash reserve ratio

| Updated on November 13, 2017 Published on November 08, 2011

Apropos the report “SBI chief for doing away with cash reserve ratio” ( Business Line, November 7), the SBI chief's call for abolishing cash reserve ratio (CRR) is quite strong in content, and deserves to be examined by the banking regulator (RBI).

Coming as it is from the person heading the biggest bank in India, the remark cannot be just brushed aside. The reason for SBI chairman's dissatisfaction with CRR stems from the fact that the balance of commercial banks with the RBI doesn't earn any interest.

How other commercial bank managements and the RBI respond to this comment: Banks definitely welcome the proposal of the SBI chief.

As for the RBI, CRR happens to be another instrument of credit control, and needs to be used when it feels that credit has to be further regulated. CRR has the ability to squeeze the funds of banks directly and so impacts the banks immediately.

Policy rates and CRR together would strengthen the intervention of the RBI in times of continuous inflationary pressures experienced by the economy.

K. V. Rao


Political similarities

“The Jaya-Mamata magic fades” ( Business Line, November 8), is a stark revelation of similarities between the two chief ministers, when it comes to playing the ‘blame game' on their respective government's erstwhile CMs.

They need to focus on what matters require their urgent attention, where the common man's interests have been overlooked, and ensure remedial action. This is the most prudent method to avoid negative criticism from the public.

Ashok Jayaram


Published on November 08, 2011
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