Business Other News 09 Jul 2019 RBI to discuss overs ...

RBI to discuss overseas bonds issue with Centre

Published Jul 9, 2019, 1:34 am IST
Updated Jul 9, 2019, 1:34 am IST
Reserve Bank Governor Shaktikanta Das
 Reserve Bank Governor Shaktikanta Das

New Delhi: After the customary post-budget meeting with Finance Minister Nirmala Sitharaman, Reserve Bank Governor Shaktikanta Das on Monday said the RBI would discuss issuance of overseas sovereign bonds with the government among other issues like interest rate cut, fiscal deficit and the crisis in non-banking finance companies (NBFCs).

He further said the system has sufficient liquidity and the Budget for 2019-20 has made provision for shadow banking sector. "We are monitoring all NBFCs and their operations at regular intervals," Das told reporters here while briefing on the post-budget scenario.

On the banking sector, Das said the Budget provision of Rs 70,000 crore towards bank capitalisation is a very positive development that will help lenders comply with the regulatory requirement and step up banking.

On transmission of rate cut by banks, Das said it used to take up to six months for an interest rate cut to be transmitted to consumers. "Now things have improved, and it is taking shorter time," he said.

"Of the 50 basis points cut in interest rate announced by the RBI prior to the June monetary policy, about 21 basis points had been transmitted and hope better transmission of interest rate cuts in coming weeks and months," he added.

On the fiscal deficit, Das said the RBI will be happy if it is kept. "In this case, fiscal deficit has been improved actually from 3.4 to 3.3 per cent of the GDP. The RBI will be happy mainly because it limits so-called crowding out effect. So, that's something positive because it gives more space for meeting the private sector borrowing," Das said.

Location: India, Delhi, New Delhi


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