Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« General »
Open DEMAT Account in 24 hrs
 Won case against income tax department but still waiting for benefit? No more delay after an update in ITR portal
 Income Tax Department regrets issuing erroneous notices to taxpayers: Know the details
 Income Tax Return: Miss THIS ITR filing deadline and you will be fined Rs 10000
 Tax contribution of petroleum sector set to drop rapidly in FY 2024-25
 Missed reporting foreign assets in ITR? File revised return to avoid Rs 10 lakh penalty
 Tax regime shift: Is filing ITR under old regime still valid after default new regime?
 Income Tax Department Targets Bogus Refund Claims, Issues Notices To Taxpayers
 IT firms bullish on higher spending due to tax cuts
 How to calculate capital gains tax on sale of land?
 Don't fall for fake notices! How to verify your income tax communication
 I decided to shift to the new tax regime. Will I lose benefit on interest income of my PPF account?

RBI turns down banks' proposal to dip into 2% of SLR to meet short-term asset liability mismatch
April, 22nd 2011

Bankers urged the Reserve Bank of India (RBI) to allow them to dip into 2% of their SLR, or statutory liquidity ratio , of the mandated 24% to meet short-term asset liability mismatch. This was conveyed by treasury heads of select banks at a meeting with senior RBI officials early this week.

The meeting was called to discuss the Deepak Mohanty report on the operating procedure of the monetary policy, which was released last month. However, senior RBI officials turned it down on the grounds that banks had not even availed of 1% of the standing facility of net demand and time liabilities (NDTL) of the total SLR in the past. Bankers also discussed issues regarding RBI's preference to maintain liquidity in a deficit mode of 1% of the NDTL.

"During the meeting, RBI officials agreed that at times it would be difficult to maintain the liquidity deficit of 1% of NDTL, but efforts have to be made in that direction," said a treasury head present in the meeting. RBI felt that the transmission of the monetary policy hinged on regulating the liquidity in the system, and liquidity in excess of 1% could thwart the process of policy transmission.

"I do not see the possibility of liquidity getting into a surplus, but certainly we wanted to be less in a deficit than it is now because the deficit now is about 2% of NDTL and we thought that the more appropriate level would be 1%. That is where we would like to see it," Subir Gokran had told research analysts soon after the January policy.

However, bankers are sceptical on RBI's desire to keep liquidity in a preferentially deficit mode. The meeting was also attended by primary dealers and mutual funds. RBI made a presentation on the report to market players. The objective was to place the report before them for their feedback and have an inclusive discussion there on the possible points of contention.

The report proposes a single operational rate, which would be the repo rate and the reverse repo. It also suggests the repo-reverse repo rate corridor to be maintained at 100 bps and the base rate to be maintained at 50 bps below the repo rate. The banker also discussed how the base rate was no more operational , and therefore, needed to be scrapped.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2025 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting