Kamath disagrees with SBI Chairman, says CRR is not an issue

Veteran banker and Infosys Non-Executive Chairman K V Kamath on Friday joined Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty when he justified the need to maintain cash reserve ratio (CRR) saying it is part of the central bank’s monetary policy.  

“I think the monetary authority (RBI) uses these tools as appropriate... this (CRR) is nothing new. India always had CRR. Honestly, I don’t think it is an issue to be made here,” he told reporters on the sidelines of the two-day eighth “India Innovation Summit” organised by the Confederation of Indian Industry (CII) here.

The suggestion to scrap CRR was tossed by State Bank of India (SBI) Chairman Pratip Chaudhuri a few days ago, saying it was a drain on the bank’s profitability as no interest was paid on it. It was struck down by Chakrabarty within a couple of days who said, “If the SBI Chairman is not able to do business as per our regulatory environment, he has to find some other place.” Kamath’s response is significant in that context.

Kamath added, “You should look at CRR as part of monetary policy and part of it is liquidity policy for banks.”

Karnataka Chief Minister Jagadish Shettar in his address, talked about the State Government’s push towards leveraging innovation for development. “Our government has constituted State Innovation Council; there are a couple of projects in the pipeline for IT and BT sectors in Tier I and Tier II cities.

 These projects have attracted stakeholders across sectors who have invested thousands of crores. We have implemented many new policies and will continue to work with CII for development of the state."

Executive Co-Chairman of Infosys Limited and Chairman of the Summit, Kris Gopalakrishnan, stressed on the need to take innovations to the rest of the world.