RBI has no exchange rate target for rupee: Subbarao

The Reserve Bank of India (RBI) does not have any target for rupee level but will use all the instruments it has to reduce volatility, Governor D. Subbarao said Thursday.

He also said the bank's monetary policy transmission is not agile as the commercial banks are reluctant to pass on the benefit of interest rate reduction to borrowers and not all the applicants for a banking licence will get one.

Speaking to reporters here, Subbarao said the bank has no exchange rate target but would use all the instruments it has to reduce the Indian rupee's volatility.

The Indian rupee fell to over Rs.60 to the US dollar recently.

Queried about the applications for banking licence, Subbarao said there are no definite numbers as to the new players and not all applicants will get a licence.

He said while increasing non-performing assets (NPA) for the banks is a concern, all the banks are adequately capitalised.

On the issue of fraudulent financial schemes, he said it is the state government's responsibility to check such schemes while RBI officials will study as to why the villagers get attracted towards such schemes.

Agreeing that the counterfeit currency is a problem, the RBI governor asked the banks to identify and report, urged the public to surrender such notes.