Background: On 24th Aug 2015, Sensex collapsed 1700 points responding to China's Sharemarket and global cues.
There was a strong push to cut RR rates by Raghuram Rajan, The Governor of the Reserve Bank of India (RBI)
Thought:
How would RR(RBI) cut rates(RR) ? He needs to tame leading banks NPAs as well.
As of now, on verge of payment banks, largest threat that Nationalized bank feel is loss of business further exposing NPAs in greater detail.
This would mean that in recovering that money, banks would not pass the rate cut to end user and we still have same issue.
The best shot is to have Banks stabilized and then go for rate cut which gets transferred to Customers enabling them to pump money in market...
There was a strong push to cut RR rates by Raghuram Rajan, The Governor of the Reserve Bank of India (RBI)
Thought:
How would RR(RBI) cut rates(RR) ? He needs to tame leading banks NPAs as well.
As of now, on verge of payment banks, largest threat that Nationalized bank feel is loss of business further exposing NPAs in greater detail.
This would mean that in recovering that money, banks would not pass the rate cut to end user and we still have same issue.
The best shot is to have Banks stabilized and then go for rate cut which gets transferred to Customers enabling them to pump money in market...
No comments:
Post a Comment