Full convertibility will have tremendous impact on banking
Kochi, Mar 29 (UNI) Stating that the banking scenario had changed completely post-liberalisation, Federal Bank General Manager George John today said full convertibility of the rupee would have tremendous impact on the sector.
Releasing a 'Treasurer's Calendar', brought out by the Bank, listing major events in the domestic and international financial markets in 2006-07 here, he said full convertibility would result in greater integration of the Indian economy with global economy.
'Any development anywhere will have an effect on the Indian economy then and there. The movement of the Indian rupee could go up and down depending on what the Japanese Finance Minister says about the US Dollar.' Stating that the RBI was now a big player in the foreign exchange market, Mr John said banks CRR or SLR were no longer the only tools for the RBI to bring about liquidity in the market.
With the country now sitting pretty on forex reserves of 144 billion USD, the RBI's main concern now was to ensure that the value of the reserves was maintained, he added.
With full convertibility, the treasury functions of banks would become more complex and treasury divisions would have to keep track of major happenings in the domestic as well as foreign markets.
The 'Treasurer's Calendar' brought out by the treasury department of the Federal Bank is primarily meant for dealers in corporate/bank treasuries and finance professionals. It details the inflow and outflow of funds in domestic and forex market, dates of coupon payment and redemption of securities, dates of auction of government securities, treasury bills, market holidays, reporting Fridays, top/spot rates of forex deals and major events and economic data of the US, UK, Euro Zone and Japan, affecting the forex market.
Presenting the first copy of the calendar to FACT General Manager, Cochin Division, N Rajasekharan, he said the publication was the only one of its kind being brought out in the country.
In a 'market review', Federal Bank official Roy Paul said lack of liquidity was a major concern for banks right now. Stating that short-term rates were expected to remain high to contain inflation, the bank said it was looking forward to relaxation in the CRR in the new Credit Policy to pump in liquidity in the market.
UNI ARC AA 1930