No bank will fail, deposits are safe: PM Of india
Posted by AdminOct 21
Prime Minister of India, Manmohan Singh on Monday forcefully assured Parliament that no Indian bank would fail and deposits were safe but also warned that the global financial storm would bring about a temporary slowdown in the Indian economy.
Making a statement in Lok Sabha, the PM said, “Our banks, both in the public sector and private sector, are financially sound and strong, well capitalised and well regulated. There should be no fear of a failure of any bank. In particular, I wish to assure depositors in our banks that their deposits are entirely safe.”
Referring to the RBI announcing a cut of 100 basis points in the repo rate — the rate at which banks can borrow — he said, “Government welcomes this decision. It will have a beneficial effect on interest rate and in combination with other steps to increase liquidity, will help to support economic activity and investment.”
Earlier in the day, finance minister P Chidambaram also welcomed the RBI decision.
Making a statement in Lok Sabha, the PM said, “Our banks, both in the public sector and private sector, are financially sound and strong, well capitalised and well regulated. There should be no fear of a failure of any bank. In particular, I wish to assure depositors in our banks that their deposits are entirely safe.”
Referring to the RBI announcing a cut of 100 basis points in the repo rate — the rate at which banks can borrow — he said, “Government welcomes this decision. It will have a beneficial effect on interest rate and in combination with other steps to increase liquidity, will help to support economic activity and investment.”
Earlier in the day, finance minister P Chidambaram also welcomed the RBI decision.
Both RBI and government are monitoring the situation and “will ensure the additional liquidity infused into the system translates into actual credit. We will not hesitate to do more if needed,” the PM said. He pointed out that the capital adequacy ratios of all banks were well above prescribed norms and some with lower ratios would be aided in accessing funds.
The PM did, however, underscore that some pain was inevitable. Despite increase in exports in dollar terms during April-August, FDI in the same period totalling $14.8 billion and first quarter growth of 7.9%, he said “we must be prepared for a temporary slowdown in the Indian economy.” He made it plain that no firm estimates were available. Some estimates project GDP to decelerate to 7.5% in the current year while others place it lower at 7%.
The PM did, however, underscore that some pain was inevitable. Despite increase in exports in dollar terms during April-August, FDI in the same period totalling $14.8 billion and first quarter growth of 7.9%, he said “we must be prepared for a temporary slowdown in the Indian economy.” He made it plain that no firm estimates were available. Some estimates project GDP to decelerate to 7.5% in the current year while others place it lower at 7%.
Source: Times Of India
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