RBI should be looking at a repo rate cut in June policy, says Bhattacharya
RBI is set to announce its second bi-monthly monetary policy for financial year 2017-18. SBI feels a rate cut from the central bank is a must.
Arundhati Bhattacharya, chairperson of State Bank of India (SBI) on Friday said she feels the Reserve Bank of India (RBI) should be looking at a rate cut in the second bi-monthly monetary policy scheduled on June 07, 2017.
Since the last three monetary policy meets, Urjit Patel, governor of RBI along with Monetary Policy Committee (MPC) have kept the policy rate unchanged.
Bhattacharya was speaking in an event held in St. Petersburg, Russia. She stated that liquidity has come back into the banking system and that demonetisation was an 'unqualified system'.
However, she also mentioned that the RBI has not yet come up with a scheme on bad loans for banking universe.
Bad loans problem has not only been haunting Indian banking sector since past few years but has also emerged as a danger to India's economic growth.
Gross NPAs of gross advances which stood at Rs 1.3 lakh crore as on March 2012, have increased by a whopping 438.46% to Rs 7 lakh crore as on December 2016.
As per the Economic Survey, gross NPAs climbed to almost 12% of gross advances for public sector banks at end-September 2016.
Recently RBI had introduced directions regarding assets under corrective action plan (CAP) on joint lenders forum (JLF).
Apart from this, Bhattacharya spoke on its merger with 5 associates and Bharatiya Mahila Bank (BMB). She said, “I think we are done with consolidation. SBI has merged its six banks and would not be consolidating more.”
In a meeting held on April 03, 2017, Bhattacharya said, “The merger process of SBI with its associate banks and Bhartiya Mahila Bank (BMB) will commence from April 24, 2017. From this day, every week one bank will be merged with SBI and by May 27, 2017, we expect the entire data merger.”
These five associate banks are: State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore.