Crr, Slr Norms For Inter-Bank Borrowing May Go

The Reserve Bank of India may withdraw cash reserve ratio (CRR) and statutory liquidity ratio (SLR) on inter-bank borrowings as recommended by the Rakesh Mohan committee on infrastructure.

This was stated by RBI deputy governor R V Gupta at a seminar on the theme Infrastructure: Vision 2000 here yesterday.

The recommendations of the Rakesh Mohan committee will be given due weightage while formulating the credit policy, Gupta said at the seminar, organised by the Indian Merchant Chamber.

The panel has also sought institutional finance for market makers, removal of restrictions on money market mutual funds and a sanction in the monetary policy for debt instrument repos.

 

Said Gupta: The Rakesh Mohan committee, which brought out the `India Infrastructure report on Wednesday, has recommended these steps to develop the debt market. All these recommendations will be given due weightage in policy-making by the government as well as in the measures to be adopted by the RBI in regard to monetary and credit policy.

The deputy governor observed that in 1996-97, the infrastructure sector witnessed sluggish growth and the composite index of six major infrastructure industries coal, electricity, steel, cement, crude petroleum and refinery products recorded a growth rate of 3.3 per cent against about 10 per cent in the corresponding period of the previous year.

However, the western region is better placed in regard to infrastructure, he said. Networking of infrastructure facilities among the four states of the region will help deliver benefits such as economies of scale, external economies and generation of income and employment through a multiplier effect, said Gupta.