A general refinance facility introduced for banks of up to one per cent of average aggregate deposits during 1996-97 and pegged
Implication
to the revived Bank Rate.
Moving away from sector specific refinance
Final Objective
to an overall general refinance facility
The central bank will use the general refinance
facility pegged to the Bank Rate to signal its
monetary stance to the financial sector.
Action
The interest rate on NRE deposits reduced to the domestic term deposit levels.
Implication
Makes NRE deposits less attractive for depositors
Final Objective
Brings about a rationalisation in the structure of deposits so that rupee deposits, regardless of the point of origin are similarly priced
Action
Authorised dealers permitted to borrow and invest up to $10 million in overseas money markets.
Implication
Banks can begin to gain experience in dealing in foreign markets and learn the tricks and nuances of the markets.
Final Objective
Prepares the financial sector for full rupee convertibility.
Action
Ten per cent CRR imposed on all forms of incremental NRI deposits
Implication
Increases the cost of all such deposits for banks
Final Objective
A uniform system of reserve requirements to be imposed on all liabilities to the public.
