Saturday, November 12, 2011

RBI says, banking sector not facing any stress

The Reserve Bank has said that the Indian banking sector is not facing any stress, though state-owned lenders need capital infusion.

RBI Deputy Governor Subir Gokarn told reporters on the sidelines of an ASSOCHAM event in Delhi that there are of course long term issues of capital. If the system is growing at 20 per cent a year, it needs the capital to grow at 20 per cent at a year. It is not any indication of systemic threat.

He, however, admitted that there could be some pressure points on the banking system on account of high interest rates.

The capital requirement of PSU banks, including SBI, for the fiscal has been estimated at between 10,000-20,000 crore rupees.

Admitting that high interest rate is hurting the economy, Mr Gokarn said, the country\'s growth rate is likely to moderate to 7.5-7.6 per cent this fiscal.

He said, slowdown in the economy is impacting the overall investment scenario in the country. Mr Gokarn said, inflation will start moderating from December onwards and dip below 7 per cent in April, 2012.

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