Central bank: Only way is to adopt correct biz practices.
In 2002, an advisory group argued for the creation of a Monetary Policy Committee in India. Much of what it recommended is relevant in the context of the current debate on MPC, based on a revised draft of the Indian Financial Code that was released last week.
The RBI and government must ensure that banks overhaul their loan appraisal process.
PNB’s gross NPA rose to 6.47% in the June quarter from 5.48% in the year ago.
The most desirable monetary policy committee will be one that gives primacy, but not total control, to the RBI.
The revised IFC proposes to do away with the veto power enjoyed by RBI Governor on policy rates, instead suggesting a decision by a majority vote.
Currently, CRR is four per cent, and if the mobilised gold is considered for meeting that requirement, banks would have additional cash for lending purposes
The draft also did away with the earlier suggestion to give the RBI Governor veto power over the MPC members under exceptional circumstances.
Mechanism proposed by the revised draft of the Indian Financial Code undermines central bank independence.
Proposes a monetary policy committee headed by RBI ‘chairperson’ to decide on rates by majority vote.
The Central Fraud Registry being prepared by RBI, the MoS said, will be a centralised searchable database which can be accessed by banks.
Earlier credit card users would get 120 days before being classified as NPAs.
This is, however, unlikely to stir the Reserve Bank of India into effecting a rate cut amid concerns of an uptick in inflation due to poor monsoon, experts said.
Was net purchaser for second time in FY16 after it bought $2.57 billion in May.
Issues of commercial viability, old and new, restrict their performance.
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