The meeting comes just days after the finance ministry released a revised draft of the Indian Financial Code that would reduce the central bank’s powers to decide the monetary policy stance.
Growth in these industries’ output was as high as 8.7 per cent in June 2014.
The central bank had earlier extended many sops for bank funding of stalled projects.
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.