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Journalism of Courage
The Reserve of Bank of India (RBI) on Thursday said all the eligible applicants may not get banking licences. We have put up all the names of the aspirants on the website and we will start the process of evaluating it, Reserve Bank of India (RBI) governor D Subbarao said.
Briefing reporters after RBI board meeting,Subbarao said,We dont want ourself locked with any specific numbers as to what number of licences we want to give. Internally,we will evaluate the applications in the 3-4 months. Then,we will submit them to an external committee to screen the applications after which we will make a decision,considering the quality parameters.
On a question whether there will be a conflict of interest when it comes to Aditya Birla Nuvos proposal,considering the groups chairman Kumar Mangalam Birlas position as a board member of RBI,Subbarao said,Aditya Birla Nuvo applying for licence is a recent development,whereas Kumar Mangalam Birla had been on the board for last six years. Anyway,we will discuss this with the government.
Reacting to finance minister P Chidambarams statement that RBI should not focus solely on containing inflation but also look at the larger mandate of growth and creation of jobs,Subbarao said RBI has been conducting itself the best way it could to balance financial stability and industrial growth. While RBI calibrates the short-term interest rate,the expectation was that monetary transmission will take place. The banks in turn are expected to respond by cutting the lending rates. Some banks have responded but some commercial banks are reluctant to pass on the benefit of interest rate reduction to borrowers.
Subbarao said: The objective of the policy is price stability,financial stability and growth and we are conscious about that. We have regards for the FMs opinion and Governments concern,and we are doing our best.”
Regarding rupee volatility he said,I cannot say anything more. We employ instruments which are available to us in order to manage volatility. Pointing out that NPA and restructured assets continue to remain a concern for RBI, Subbarao said: While there was a decline in NPA figures between December 2012 and March 2013,we are not sure whether this trend will continue.
On the fraudulent schemes like Ponzi and multi-level marketing,he said RBI has identified two districts in Tamil Nadu to undertake a pilot study to understand how these schemes are working,and what attracts people to these kind of schemes.
