RBI Post Budget Meet:Reserve Bank of India (RBI) governor Shaktikanda Das Monday said that he will meet the heads of public and private sector banks later this week to discuss the pass over of the interest rate cut it had announced to borrowers. Speaking to media after the Finance Minister Arun Jaitley's address at the RBI central board meet, Das said that the transmission of its monetary policy decisions is important and will be discussed with the public and private sector CEOs.
Das is slated to meet the heads of public and private sector banks on Feb 21 to discuss the situation. RBI earlier this month had cut the benchmark interest rates by 0.25 per cent to 6.25 per cent
Answering media questions after the post budget meet, Finance Minister Arun Jaitley said that "Fewer, Mega Banks which are strong" are necessary to consolidate India's banking sector.
Government has merged public sector banks twice; first, State Bank of India with its associate banks, second, the recent merger between Vijaya Bank, Dena Bank and Bank of Baroda.
Das also said that RBI will ensure that banks follow rules amid reports of irregularities in disclosure by Yes Bank recently. Meanwhile, he said that the issue is between the regulator and regulated entity but RBI will ensure that all rules are followed.
RBI had pulled up Yes Bank for revealing a "confidential" report by it and warned the private sector lender with regulatory action. The disclosure by the bank led to a 30 per cent rise in its shares last Thursday.
Talking about the interim dividend to be announced by the central bank, Jaitley said that no specific decision on the interim dividend has been taken. Das, however, explained that the decision on the disbursal of the interim dividend will be taken by the RBI board, and not by the RBI central board.
The interim dividend will help the government ease fiscal pressure and also aid it in giving the economy a boost before the crucial general elections in April-May this year. The government has projected the fiscal deficit target at 3.4 per cent for the financial 2019-20 in the interim budget (2019-20).