RBI to take steps to address any liquidity deficit: Gokarn
The Reserve Bank would take steps to address the liquidity deficit in the banking system, if required, its Deputy Governor Subir Gokarn said.
December 07, 2012 / 22:31 IST
The Reserve Bank would take steps to address the liquidity deficit in the banking system, if required, its Deputy Governor Subir Gokarn said. "Liquidity deficit in the banking system is within comfortable levels. RBI will take steps if needed," Gokarn said at a seminar organised at CII-Suresh Neotia Centre of Excellence.
Also Read:Why next year will be 'easier' for India's economyADB lowers India growth forecast to 5.4% for 2012-13FDI to boost supply chain; CY13 to see higher inflows: HSBC Gokarn said the RBI generally conducts an open market operation (OMO) to deal with stress in liquidity. "If we see stresses remaining in the system, then obviously we have the capacity to respond to them," he said. Talking about Non-Performing Assets (NPA) in the banking system, he said that there were some macro-economic cycles which influenced the pattern of bad assets."But NPAs will start to decrease once there is an improvement in business cycles", Gokarn said. He, however, said the presence of huge NPAs in the Indian banking system would pose a threat to capital adequacy of the banks. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
