The Y. H. Malegam Committee, set up to study the issues and concerns of the micro finance institutions (MFIs), may give its report sooner than the end-January target, Reserve Bank of India Governor D. Subbarao said. He also said that there was no transgression of the loan-sanctioning process in the recent furore over housing loans.
Addressing a press briefing after a meeting of the RBI's Central Board of Governors here on Wednesday, he said that the meeting discussed issues regarding the Malegam Committee report as also guidelines on new bank licences besides reviewing macro economic issues.
He said that the committee was set to visit Andhra Pradesh next week where it would meet the Chief Minister. It would also go to other parts of the country. To a question on whether any interim action was being planned, Dr. Subbarao said that it had been decided that the RBI would convene a meeting of the banks to understand “where we stand on this issue in Andhra Pradesh (where the issue came to a head first) and elsewhere in the country.” The six-ember panel was set up in October-end with a three-month timeline.
On the liquidity situation, Dr. Subbarao said that the RBI was deeply conscious of the situation and the build-up in government cash balances. He said that the RBI was expecting the government to spend so as to ease the liquidity situation, caused partly by the divestment proceeds. The government cash balances now stood at Rs.92,000 crore. He said necessary steps would be taken when required.
On the housing loan scam, he said there had been no transgression of the loan sanctioning process. The Department of Banking Supervision was examining the matter where it was found that all barring one account was standard. The default in the lone account was unrelated to a housing loan, he said.
Subir Gokarn, Deputy Governor, said that rising commodity prices like that of oil remained a visible risk amid the Euro-zone crisis although they were not related. “The fact that prices are going up in a situation where the overall rate of global economy is still sluggish is going to make the challenge of inflation management more difficult,” he said.
