The Reserve Bank of India in its first monetary review of current financial year kept the Bank rates static. The Repo at 6 and Reserve Repo at 5.75 remained unchanged. The growth rate is estimated to be at 7.4 per cent.
The RBI is tightening its grip on the banking sector. It has asked the banks and non banking financial entities to stop dealing in crypto currencies like Bitcoin.
All payment system operators mandated by the RBI to store data within the country by September positively. This move will compel the companies with data centre outside India to set up the same inside India to comply with RBI guidelines.
The Government of India has also told the public sector banks that now on it would not provide financial packages to the bank as capital back up to keep on financial operation.
The Government has also hinted the banks not in good financial health and operation will be merged in other strong banks. The SBI has already launched move to merge all its associated banks into the main organization. The Bank of Saurashtra, Bank of Indore etc. have been merged.
With RBI directed the banks to file quarterly reports about loans and NPA. Many more cases of bank fraud have come to light. The public confidence in the banking system has been badly shaken and Government and the RBI are making all out efforts to restore it soon.
The Government through its Finance Ministry and Banking departments is the owner of the commercial banks and RBI is not its master.
At such critical juncture the news about the serious kidney ailment of Union Finance Minister Mr.Arun Jaitley is distressing and will hamper measures to set right the banking sector. He may need kidney transplant. He is confined to home in restrictive conditions and not attending office.
Although the Government claims control on prices but then too no change in bank rates indicated otherwise.
With number of bank scams the commercial banking are feeling shy to grant industrial loans as if every case is risky. Such apprehensions and fear with harms the banks more and badly affect the trade, industry and commerce. Banks must resume normal banking for the benefit of all. To remain shy and fearful will spoil the economy as a whole.
Disbursement of loans are the basic functions of the banks. Small consumers loans for house, car etc. alone cannot revive the banks and confidence of it.