“Everybody, including the small banks have to survive in the market and they have to become more agile. In fact, some of them are quite agile,” says Shaktikanta Das, Governor, RBI.
Any inflation forecasting without a rupee level in mind is going to be tough. So Reserve Bank of India will have to work with the band which they feel is the right band for rupee?
We do factor in the eventual exchange rate of the rupee vis-à-vis the dollar. It is a function of the market and we analyse how the exchange rate is going to evolve during the current year in the next six months and in the next one year. In the monetary policy report which we bring out twice a year, we do give out the level at which we have assumed the rupee to a dollar rate for our calculations. We give it out once in six months and there is a reason for that because if you give out rates every time, then sometimes it can create very distorted expectations in the market also.
Deposit growth is lagging credit growth. You appealed to the banks last time in terms of what kind of lending they should do but is there something which needs to be done immediately because when we speak to even , on a large base they are talking about a 13-14% credit growth and deposit growth is nowhere close to that. Could that create a mismatch which RBI now needs to address?
The overall credit growth according to the latest data is 14.5% as on 29th July year on year. So to sustain a 14.5% credit growth, we need capital. Thanks to our working very closely with the banks and nudging the banks, almost all banks – both public and private sector – have raised capital. We also need funding resources coming from deposits.
Now what I said in the last MPC and I would like to reiterate that again is that if they have to achieve a credit growth of 13%-14% or 14.5% or 15%, the banks will have to raise resources by way of increasing the deposit rates and it has happened. Now every now and then, some bank or the other are seen adjusting their MCLR and increasing deposit rates.
On Monday evening, some banks raised the rates. They have introduced new deposit schemes at slightly higher rates because banks will have to raise their deposit rates so as to meet their credit requirements. So it
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