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Bank Of India
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RBI Policy Comments by Mrs. V.R. Iyer, CMD, Bank of India

Inflation on its mind, RBI maintains status quo again

Sep 30, 2014   16:04 IST 
India

Largely the policy declarations are in line with our expectations. Inflation targets for 2015 and 2016 appear to be within reach as of now. RBI has reconfirmed GDP expectations at 5.50% for the current financial year.

 

We do not expect any movement in interest rates in near future as a consequence of policy measures. Given reverse repo auctions of about Rs 20,000 crore, cut in Export refinance from 32 % to 15 % will not affect much as the system is having excess liquidity. Guidelines for cut in HTM, spread over next one year beginning January 2015, are a welcome step as it removes uncertainty on this issue.  Banks can now better plan dilution from HTM.

 

By allowing up to 7 % of NDTL to be reckoned for LCR purpose, the system is now better placed for compliance. In our case it means that Rs 28,000 crore from SLR will be available for classification as HQLA ( high quality Liquid assets). Importers are now allowed to hedge 100 % , in place of 50 %, on the basis oftheir last three years turnover or the previous year’s turnover, whichever is higher. It will help importers in hedging their exposures in time.

 


 
 
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