Govt, RBI doing everything to get hold of economy: Sinha

Dy Gov Anand Sinha said the central bank and the Indian government are taking necessary steps

 

The government and the Reserve Bank of India (RBI) are taking all possible steps to get control over the economy, RBI Deputy Governor Anand Sinha said today.

“Inflation, which is proving to be quite stubborn, growth which has dipped, and current account deficit which has ballooned ... We and the government are doing whatever it takes to get hold on the macro economy,” he told the students of a suburban college.

Sinha, who looks after banking supervision at RBI, added the financial sector was bound to grow in tandem with the growth of the real economy. “The financial sector is going to expand, very considerably,” he said, stressing the need to expand the presence of banking. The new bank licences, he said, were aimed at increasing the footprint of the banking sector, keeping in mind the overall agenda of financial inclusion.

RBI opted for allowing companies into the banking due to their ability to bring more capital to the table, which in turn will help the financial inclusion objective, he said.  

“In the new set of guidelines we have gone ahead and enabled large business houses and large commercial entities to be able to set up banks...This is because we need high technology and deep pockets to be able to fulfil our agenda of financial inclusion,” Sinha said.  

“This is also because we need more capital to come into the banking system and they are people who are having deep pockets.” The last date for submitting applications for the new bank licences is July 1.