‘NPA situation is not alarming but disturbing’

Wednesday, 31 October 2012 02:24 The Hindu
RBI Governor D.Subbarao once again chose to stand firm and hold the repo rate in his October monetary policy review. There has been mounting pressure both from markets and from the Government to cut rates and stir growth. Yet, inflation has remained uncomfortably high and the RBI has chosen to not dilute its anti-inflationary stance. Why did you not make any statement on bank licenses?

The reason we did not make any reference was because there was no change in the situation. In order to allow corporate into the banking area, we need the power to supersede the board, power to approve shareholding beyond 5 per cent, power to approve voting rights, consolidated supervision of the bank, etc. All this requires amendment of the Banking Regulation Act, which is pending before Parliament.

When you don’t cut rates, isn’t the common man affected?

We are concerned about the common man. We want to make sure that he has access to credit at reasonable rates of interest. We are also concerned that there should be low and stable inflation so that he is protected. The RBI’s policy is aimed at making life better for the common man.

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