Rbi Speak: What Rbi Governor And His Deputies Said On Issues In Banks, Nbfcs
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The monetary policy committee of the Reserve Bank of India (RBI) on Friday made it clear that the days of its easy money policy will soon come to an end. At the press conference after announcing the April bi-monthly policy, governor Shaktikanta Das and his deputies answered questions on other issues in the banking and financial services space. Here are some key issues addressed by the RBI top brass:
On HDFC Ltd-HDFC Bank merger
Das: We have received a proposal from HDFC Ltd and HDFC Bank with regard to the merger announcement they have made. The proposal is under examination and we will, in terms of our various regulatory guidelines and other aspects, examine them and as and when a decision is taken, you will come to know about it.
On rupee-rouble trade
Das: The government is ceased on those matters, but as far as RBI is concerned, it will not do anything that goes against economic sanctions on Russia.
On consumption:
Das: Private consumption still trails the pre-pandemic level. Rural demand will get support from Rabi crop. All restrictions due to covid-19 have been removed. Urban demand should also revive. Mobility has increased. There are enough factors to give an upward push for rural and urban demand.
Recent know your customer (KYC) data leaks
Deputy governor Rajeshwar Rao: The cases where this kind of irregularities have happened, we are looking into it and based on the outcome of our investigation, appropriate action could be initiated. As regards to KYC issues, there are certain operational issues also. Internally also we are looking at the KYC issues and if required, we will look at what kind of amendments are required to the regulations to make it simple but at the same time make them effective and address the concerns on an ongoing basis.
Complaints against digital lenders
Das: We have also received a lot of complaints pertaining to digital lending. We are taking immediate actions even when there are complaints on social media. The digital lending committee’s report was open for public comments till 31 December and we have received numerous comments. We have examined those comments and now are deliberating internally and will finalize it in the next two-three months.
Conversion of large non-bank lenders into banks
Das: Given the scale-based regulation for non-banking financial companies (NBFCs) we have now introduced, and our current status with regard to bank licensing policy, it is for large NBFCs to take their own commercial decisions about their future. If they want to continue as it is, we have no problem with that, or if they want to go for some kind of restructuring, it is for them to decide.
On why inflation forecast was hiked
Das: We have revised our inflation and growth projections and if you look at the inflation projection in particular, primarily the projections have been revised upwards due to war-induced factors. Among the other major reasons, edible oil prices have steepened due to war-related factors. Prices of wheat have also gone up and the cost of feed which feeds into the prices of poultry, eggs and dairy products.
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