Fortune India Boardroom: Leading bankers and experts discuss banking and beyond

/4 min read
At the Fortune India Boardroom, leading bankers and experts highlighted that the time is ripe for the banking sector to take cues from the central bank and match its pace.
Fortune India Boardroom: Leading bankers and experts discuss banking and beyond
(From left): R. Subramaniakumar, Inderjit Camotra, K.V.S. Manian, Gayathri Parthasarathy, and Satish Marathe. 

A 100-BASIS-POINT repo rate cut, liquidity release of ₹2.5 lakh crore by slashing the cash reserve ratio (CRR) by 1%, eased project finance and gold finance norms, and relaxed liquidity coverage ratio allowing banks to assign lower liquid assets against digital deposits — the Reserve Bank of India (RBI) is not mincing words.

“Since January, we have injected a lot of durable liquidity through various means like CRR cut, open market operations, and buy-sell swaps. A total of ₹9.5 lakh crore of durable liquidity has been injected into the banking system since January. As a result, after remaining in deficit since mid-December, liquidity conditions have transitioned to surplus as of the end of March,” said RBI governor Sanjay Malhotra, as he announced the repo rate cut on June 6. The regulator also deferred the expected credit loss guidelines, which mandated anticipatory loan-loss provisioning by banks.