According to RBI data, deposits grew by 9.6 percent compared to 10.2 percent year-on-year Borrowing rose to 17.9 percent from 6.5 percent a year ago
Meeting between RBI and Government Banks
Amid the changing global economic situation, an important meeting is going to be held today to discuss the strength of the banking system and other related issues. Reserve Bank of India (RBI) Governor Shaktikanta Das will hold a meeting with CEOs of public sector banks on Wednesday. The meeting will discuss the slowdown in deposit growth and maintaining high credit demand. In fact, bank deposit and loan rates have seen completely different trends under the changing circumstances. The reasons and effects of which can be discussed today.
Why is the meeting happening today?
According to RBI data, deposits grew by 9.6 percent compared to 10.2 percent year-on-year Borrowing rose to 17.9 percent compared to 6.5 percent a year ago. According to the agenda issued for the meeting, stability including price fixation and slow growth of deposits will be discussed, sources said. Apart from this, asset quality in the retail and micro, small and medium (MSME) sectors will be discussed in the meeting, according to sources.
Besides, the meeting will also review the functioning of digital banking units launched by Prime Minister Narendra Modi last month. It is noteworthy that the improved economic performance in the first half of the current financial year has been strongly supported by the banking system. Apart from this, credit disbursement has also increased in the retail, industrial and service sectors.
Relief from rising inflation
The Reserve Bank meeting comes at a time when the central bank has been relieved by softening inflation rates. The main concern of the Reserve Bank is the rising inflation rate and based on this the bank is reviewing its policy. With inflation easing, the Reserve Bank has had some room to keep rate hikes low. In such a situation, in today’s meeting, the bank will try to know the direction of demand from the statistics of loan rates in high rates. Hence the subsequent review will help in such rate decisions, which can achieve both growth and inflation targeting.