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RBI Governor to hold bankers meet on liquidity next week

Written by: Staff
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Mumbai, Mar 24 (UNI) Reserve Bank of India (RBI) Governor Dr Y V Reddy today said that he has called a meeting of the bankers next week to assess the current liquidity condition in the banking system.

Dr Reddy told mediapersons here that appropriate action would be initiated after the Central Bank receives feedback from banks over their problems of liquidity availability.

''We have various instruments to address the issue'', he said.

On the current tightening trend of liquidity, Dr Reddy said, this is ''frictional liquidity'' and not ''structural'' liquidity problem.

RBI which is currently undertaking a review of the economic situation including the huge credit offtake from the banking system due to renewed demand from productive sectors of the economy, is expected to announce its measures on its annual monetary and credit policy annoucement on April 28.

Yesterday, top executives of leading public sector banks held a meeting with the Finance Minister P Chidambaram and informed him that they had no other options but to increase their prime lending rates (PLRs) in order to overcome the tight liquidity conditions.

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