 "Focus on sustainability of agriculture, not loan waivers, says RBI")
Doing away with assured liquidity for the banking system, as proposed by an internal group of the Reserve Bank of India (RBI), can bring more efficiency in a bank’s liquidity management.
In the current framework, the RBI assures liquidity of up to 1 per cent of the deposit base — 0.25 per cent for individual banks and 0.75 per cent for the overall system.
Now the framework is proposing that system liquidity should ideally be kept in deficit mode of 0.25-0.50 per cent of the deposit base.
It is important to mention here is that banking system liquidity is highly
