COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Jalan says RBI will act to calm volatile, Kargil-affected forex market

The Reserve Bank of India is keeping a close watch on the foreign exchange markets in view of the developments in Kargil. India's central bank will continue to monitor the position while taking appropriate measures when neccessary, RBI governor Bimal Jalan said in Bombay today.
Jalan admitted there is some uncertainty in the market. In March, April and May of the current year, the RBI was buying dollars from the market. In fact, the central bank brought as much as $ 2.5 billion during these three months.

Last week, however, the RBI sold dollars to State Bank of India in order to meet some extra demand.

''Our policy is to keep forex markets orderly and meet, as neccessary, temporary demand-supply gaps that emerge from time to time. We have deliberately followed a policy of keeping our reserves at a very high level in order to take care of such situations,'' he stated.

Jalan assured that except for some temporary hiccups, the financial markets are functioning normally and overall conditions are satisfactory. The RBI will continue to monitor the position and as in the past take appropriate measures when neccessary, he added.

On self-employement schemes, he said recovery of loans is a collective responsibility of the bankers as well as local bodies at the grassroot level. The success of rural credit schemes for the upliftment of rural poor will not be successful unless they are completely involved in the process, he emphasised.

He made these observations while addressing the meeting of central level co-ordination committee of the Union government's new scheme Swarna Jayanti Gram Swarozgar Yogana.

Jalan said that the multitude of bankers should initiate steps for facilitating the recovery process of loans as their mission. They should be less bureaucratic and be more people-oriented. ''The recovery of loans at present is not good as it should be and is estimated to be around only 35 per cent,'' he said.

He suggested the Indian Banks Association set up a bankers committee at the lower level to go around the country and provide feedback of the ground realities and suggest what needs to be changed.

The RBI has already initiated steps in that direction and added that a special cell of the RBI and a committee of the National Bank for Agriculture and Rurual Development would be set up to identify issues and problems in this regard.

UNI

Business news