'RBI must regulate deposit-taking cos for fin stability'

CRR, SLR could come down further: Subbarao

RBI Governor Duvuuri Subbarao today cautioned against taking away regulatory oversight on NBFCs from RBI and placing them under a Unified Financial Authority, saying such a move will go against financial stability and whittle down the impact of monetary policy.

Stating that there are strong inter-linkages between banks, NBFCs and other deposit-taking entities, he said for monetary policy to be effective and financial markets to remain stable, they should be regulated by the central bank.

Further, the outgoing RBI Governor, who had disagreed with bankers' call to further trim the cash reserve ratio or pay interest on these deposits, and cut SLR, today said "perhaps" there is a need to reduce these rates.

"I do recognise that there is a demand, and perhaps a need, for further reduction (in CRR and SLR)," he told the FIBAC summit, the premier annual banking summit here.

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