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Savings bank deregulation not now

Our Bureau


Dr Bimal Jalan, RBI Governor, releasing the book ` Essays on economic and financial sector reforms in India ' by Dr Y.V.Reddy, Deputy Governor, in Chennai on Monday,

CHENNAI, July 15

THE Reserve Bank of India has practically ruled out deregulating savings bank rates for now. "We cannot do it right now," said the RBI Governor, Dr Bimal Jalan, speaking informally to journalists at a function here. He did not also want to take a call on whether or when there would be cut in the Bank Rate.

"We've said what we have to say in the (recent Credit) Policy, that we always keep the option (of Bank Rate cut) open. When we feel it should be done, we will do it up to 50 basis points," he said.

Asked if there was a change in RBI's projection of growth for this year, given that monsoon in some areas had been deficient, Dr Jalan said it was too early to judge the monsoon behaviour.

"We are sticking to our projection of six per cent to 6.5 per cent," he said, adding that the RBI had always said that projections could vary with the monsoon behaviour.

On the foreign exchange front, he said the "situation is very comfortable".

Dr Jalan was speaking at the function for the release of a book published by the Oxford University Press, entitled `Y V Reddy: Lectures on economic and financial sector reforms in India'. The book is a compilation of lectures by Dr Y.V. Reddy, Deputy Governor, RBI.

The function was held at the RBI Staff College here. Dr Jalan praised the work of the college and observed that the level of professionalism in RBI was regarded very high in international institutions.

Observing that India was able to "provide leadership" in setting benchmarks in areas such as banking and capital adequacy, Dr Jalan said that still "we have a long way to go".

"It would be no exaggeration when I say that our banks and other public institutions do not still provide the kind of customer and public service that our people have the right to expect," he said, pointing out that a cheque sometimes took even three weeks to be credited.

This, he said, was "not anybody's doing, but a part of our system, procedures, the way we think about it".

`Too early to write off monsoon'

NEW DELHI: The Government has said that it is too early still to conclude that the monsoon has failed. "The monsoon started off well, but lost steam in between. It may gather steam again'', said a senior Finance Ministry official, adding that a clear picture would emerge after a fortnight.

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