RBI to discuss issuance of sovereign bonds with Govt: Das
| Date :09-Jul-2019 |
Finance Minister Nirmala Sitharaman with RBI Governor Shaktikanta Das during the post-budget
meeting of the RBI’s central board in New Delhi on Monday. (PTI)
NEW DELHI:
RESERVE Bank Governor Shaktikanta Das on Monday said the Central Bank will discuss issuance of overseas sovereign bonds with the Government. After the customary post-budget meeting with Finance Minister Nirmala Sitharaman, he said the system has sufficient liquidity and the Budget for 2019-20 has made provision for shadow banking (NBFC) sector.
“We are monitoring NBFCs and their operations at regular intervals,” he told reporters here. He said Budget provision of Rs 70,000 crore towards bank capitalisation is a very positive development that will help lenders not just comply with the regulatory requirement but also step up banking. On interest rate transmission, he said it used to take up to six months for an interest rate cut to be transmitted to consumers but things have improved, and now 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, he said, hoping better transmission of interest rate cuts in coming weeks and months. Expects quicker transmission of rate cut by banks:
RBI Governor: AFTER delivering three back-to-back rate cuts, the Reserve Bank on Monday said it expects a quicker transmission of the interest rate cuts by banks to consumers by way of cheaper home, auto and personal loans. During this year, the RBI reduced the key policy rate thrice with an aggregate reduction of 0.75 percentage point in the repo rate, the rate at which RBI lends to banks. “In the last MPC meeting (June 6) I had said that by that time 50 basis points of repo rate cut had been announced, and out of this 21 basis points had been transmitted.
And one positive thing that is happening now is, earlier it used to take six months for transmission, now the transmission is taking a much shorter period of 2-3 months,” RBI Governor Shaktikanta Das said. “Thereafter we announced 25 basis points cut. So, it’s now entirely 75 basis point cut. We are collecting the data and also you have to keep in mind that right from the month of June, in fact, June 1, the system is more than adequately surplus in liquidity,” he said while addressing media after the customary post-budget meeting with Finance Minister Nirmala Sitharaman. He further said overall the system liquidity is hugely in surplus and if individual banks have liquidity issue, the RBI will provide liquidity support to them.