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No additional govt borrowings this fiscal, says RBI

There would not be any more government borrowing from the market in the remaining two weeks of this fiscal other than what has already been announced, Reserve Bank of India deputy governor S P Talwar said today.

Responsing to a query whether there would be additional government borrowing in the remaining days of this fiscal, Talwar said, ''I don't think so. There will be no more borrowing other than what the government has already announced.''

So far in fiscal 1998-99, the government has borrowed about Rs 932 billion in dated securities and 364-day treasury bills. Net of repayments, the borrowing was about Rs 644 billion.

Finance Minister Yashwant Sinha, in his 1999-2000 Budget presentation, had projected net borrowings in 1998-99 at about Rs 649 billion.

This would suggest a small borrowing of Rs 50 million before March 31, 1999.

This borrowing is likely to occur through a 364-day treasury bill issue. A 364-day t-bill tender is scheduled for March 24. The RBI has yet to announce the volume of bills to be offered at the tender.

Other borrowings expected before March 31 are those in 14- and 91-day t-bills on March 19 and March 26.

Talwar evaded reply on any move to cut cash reserve ratio, stating that the credit policy is being prepared and would be announced next month.

Talwar said though there should not be any objection to development financial institutions' plans to convert themselves into commercial banks or non-banking financial companies, DFIs should ideally do it in a five-year period.

As it becomes difficult for DFIs to turn themselves into commercial banks or NBFCs at the current rate of statutory liquidity ratio and cash reserve ratio, five years would be an ideal period when fiscal consolidation programme of the government would be completed, he said.

However, if any DFI completes its conversion sooner and complies with RBI regulatory norms as well, there should not be any objection to the move, he said.

Talwar said there is no such thing as minimum regulations as there has to be a set of parameters to regulate the banking industry. Instead, there should be appropriate regulations in place, he said.

IFCI chairman P V Narasimham said there should be product- or asset-based regulations as against the general ones, which is the practice at present.

Alok Agarwal, treasurer of Reliance Industries, lamented that there are not many options regarding long-term capital finances as compared to the short-term funds.

UNI

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