Summary
Contents
Do you often wonderIs my money safe in banks? India is grappling with its worst banking crisis ever, and we are still trying to figure out what landed us here. This book analyses the role of the government and RBI in allowing the problem to reach the dimension it has assumed today. When will the never-ending NPA issue be resolved? Does it make sense to merge two PSBs when the culture and governance structures are alike? Should the RBI reserves be used in times of crisis? Should the tenure of a CEO be long or short? The book ponders and debates on some of these questions. Hits and Misses presents the two sides of the Indian banking story by giving an account of the reforms as well as quandaries in times of extraordinary economic and political challenges. The book answers many relevant questions by highlighting the highs and lows of the banking sector, which became subjects of debate in media and financial circles.
Relevance of CRR
Relevance of CRR
The CRR is quite unique and a tool of monetary policy for the RBI. By statute, banks have to keep a certain amount of their NDTL in the form of cash with the RBI. The earlier logic was that this was meant to be a safety buffer to ensure the solvency of the bank. It came to be used as a tool of monetary policy as any change in the threshold level of these balances would lead to resources of banks being increased or decreased. Hence, the quantum of lendable funds can be increased or decreased by changing the CRR. It is universal in the sense that it applies to all banks and not just to specific banks, and ...