‘Will ensure that short-term interest rates stay in line with our assessment'
The Deputy Governor of Reserve Bank of India (RBI) Shyamala Gopinath said on Monday that the central bank is closely monitoring the liquidity situation.
Speaking to the media after inaugurating the launch of Canara Bank's mobile banking product, CanMobile, Ms. Gopinath said the impact of rising interest rates on the Union Government's borrowing programme would depend entirely on how the markets bid in the auctions.
Referring to the levels of liquidity in the monetary system, Ms. Gopinath said, “As of now we do not see any stress in the system”. She pointed out that the current call rates do not reflect any stress. The advance tax payments, which will commence in about a week, would also ease the situation, she added. “We would ensure that the short-term interest rates stay in line with our own assessment,” she said. Asked about the cost of state governments' borrowing programme, Ms. Gopinath said, “We do not expect any problem with the borrowing programme going through, but with what ease would depend on how the markets behave”.
About the RBI's stand on black money, Ms. Gopinath said the central bank does not have a stance on the issue. However, with respect to the inflow of funds into Indian stock markets through instruments such as Participatory Notes, she said the Securities and Exchange Board of India has “already initiated various measures”.
Referring to the quality of capital inflows entering India, Ms. Gopinath said, the Government and the RBI have already said that foreign direct investment would be preferred to portfolio inflows. From a stability standpoint, there was no cause for worry now, she added.
The Chairman and Managing Director of Canara Bank, S. Raman, said the new product on the mobile platform would be “simple, safe, secure and swift.” He said the bank would add more services to the platform within the next few months.
The service facilitates customers to conduct transactions on 24X7 basis from anywhere with the use of mobile handset. Registered customers of CanMobile can now access Canara Bank's services for balance enquiry, viewing of last five transactions, transfer funds intra-bank and inter-bank through Inter Bank Mobile Payment System provided by National Payments Corporation of India. At present, the bank does not levy any service charge for funds transfer. Customers can daily transfer up to Rs.50,000 through Java/GPRS-enabled mobiles and up to Rs.5,000 through non-Java/non-GPRS-enabled mobiles by using Unstructured Supplementary Services Data SMS.