ID :
23853
Sat, 10/11/2008 - 09:50
Auther :
Shortlink :
http://m.oananews.org//node/23853
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Deposits safe; RBI ready for more steps, economy strong: FM
V S Chandrasekar
New Delhi, Oct 10 (PTI) Unfazed by the global financial crisis, Finance Minister P. Chidambaram Friday asserted that fundamentals of the Indian economy are strong and that savings in banks are "completely safe".
He admitted there is a liquidity crunch in the market
and that the economy was facing 'spill over and ripple'
effects of the global storm but assured the country that the
"Reserve Bank of India (R.B.I.) is ready to take further steps
and infuse more liquidity if necessary."
Chidambaram was confident that the country can weather
the storm and appealed to "all the players in the economy" to
cooperate with the government in the task.
In an interview to P.T.I., the Minister said "the
weekend is a good time for people to reflect. Firstly, those
who have money... there have been wage increases for the
government servants, and many have received Diwali bonuses.
"Those who have money should spend some money and
should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending
on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he
said.
The Finance Minister's remarks assume significance in
the backdrop of a crash in the stock markets, led by bank
scrips, that prompted R.B.I. to cut Cash Reserve Ratio by 100
basis points to release about Rs 40,000 crore in addition to
Rs 20,000 crore unlocked on Monday.
Secondly, the Finance Minister said those who need
money for running their businesses, trade and firms, the
government recognised that there is a liquidity crunch.
"But we have responded swiftly and we have infused a
huge amount of liquidity. Between now and October 25 or so, a
huge amount of liquidity will find its way into the Market
through C.R.R. cut, fertiliser subsidy, additional spending on
National Rural Employment Guarantee schemes and payment to
banks for loan waiver," he said.
Besides, the R.B.I. is ready to take further steps to
infuse more liquidity, if necessary, he added.
On deposits in banks, Chidambaram said "no depositor
need have any reason to worry. Different investors have
different risk profiles. But if you are an investor you should
take informed decisions. The last thing you should do is to
act in haste. The last thing you should is to give room for
panic."
He maintained that the fundamentals of the real
economy were strong. "If you ask me weather the fundamentals
of the economy have changed so dramatically as shown in the
stock market, the answer is no."
In fact, Chidambaram said that some promoters were
buying shares this time. Therefore, no investor need to take
any decision in haste or in panic. "He or she should take
informed decisions."
On the current global meltdown, Chidambaram said there
was a storm blowing in the world. "We did not not create the
storm. We are facing the spillover effects or the ripple
effects of the storm.
"We must brace ourself and weather the storm. I am
confident that the Indian economy is strong and resilient to
weather the storm and I would request all players in the
economy to cooperate with the government in weathering the
storm," he said.
"The weekend is a good time to calmly reflect on the
situation," he said.
The minister said inflation was inching down and huge
capacities were being added. "Our regulators are vigilant and
any citizen of India should reflect calmly on the way we
should weather the storm."
On a query, he said the export and import growth was
35.1 and 37.5 per cent respectively in dollar terms. PTI VSC
New Delhi, Oct 10 (PTI) Unfazed by the global financial crisis, Finance Minister P. Chidambaram Friday asserted that fundamentals of the Indian economy are strong and that savings in banks are "completely safe".
He admitted there is a liquidity crunch in the market
and that the economy was facing 'spill over and ripple'
effects of the global storm but assured the country that the
"Reserve Bank of India (R.B.I.) is ready to take further steps
and infuse more liquidity if necessary."
Chidambaram was confident that the country can weather
the storm and appealed to "all the players in the economy" to
cooperate with the government in the task.
In an interview to P.T.I., the Minister said "the
weekend is a good time for people to reflect. Firstly, those
who have money... there have been wage increases for the
government servants, and many have received Diwali bonuses.
"Those who have money should spend some money and
should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending
on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he
said.
The Finance Minister's remarks assume significance in
the backdrop of a crash in the stock markets, led by bank
scrips, that prompted R.B.I. to cut Cash Reserve Ratio by 100
basis points to release about Rs 40,000 crore in addition to
Rs 20,000 crore unlocked on Monday.
Secondly, the Finance Minister said those who need
money for running their businesses, trade and firms, the
government recognised that there is a liquidity crunch.
"But we have responded swiftly and we have infused a
huge amount of liquidity. Between now and October 25 or so, a
huge amount of liquidity will find its way into the Market
through C.R.R. cut, fertiliser subsidy, additional spending on
National Rural Employment Guarantee schemes and payment to
banks for loan waiver," he said.
Besides, the R.B.I. is ready to take further steps to
infuse more liquidity, if necessary, he added.
On deposits in banks, Chidambaram said "no depositor
need have any reason to worry. Different investors have
different risk profiles. But if you are an investor you should
take informed decisions. The last thing you should do is to
act in haste. The last thing you should is to give room for
panic."
He maintained that the fundamentals of the real
economy were strong. "If you ask me weather the fundamentals
of the economy have changed so dramatically as shown in the
stock market, the answer is no."
In fact, Chidambaram said that some promoters were
buying shares this time. Therefore, no investor need to take
any decision in haste or in panic. "He or she should take
informed decisions."
On the current global meltdown, Chidambaram said there
was a storm blowing in the world. "We did not not create the
storm. We are facing the spillover effects or the ripple
effects of the storm.
"We must brace ourself and weather the storm. I am
confident that the Indian economy is strong and resilient to
weather the storm and I would request all players in the
economy to cooperate with the government in weathering the
storm," he said.
"The weekend is a good time to calmly reflect on the
situation," he said.
The minister said inflation was inching down and huge
capacities were being added. "Our regulators are vigilant and
any citizen of India should reflect calmly on the way we
should weather the storm."
On a query, he said the export and import growth was
35.1 and 37.5 per cent respectively in dollar terms. PTI VSC
