RBI should have put money into people’s pocket: Congress
New Delhi: The Congress on Friday slammed the RBI decision to increase liquidity into the banks, saying the money should have gone into people’s pocket and that the RBI decision would not yield much.
A joint statement by Randeep Surjewala and Gaurav Ballabh said: “Instead of addressing demand, which typically involves putting money into the hands of the people, the RBI has decided to increase liquidity of the banks to lend more at a lower interest rate. Unfortunately, in a system that is grappling with fear, this type of prodding to lend will not yield much result.”
The RBI in its COVID19 stimulus 2.0 has again missed the bus in the need to fuel demand, they said. The pandemic has reached disturbing proportions and the consequent lockdown has completely rendered businesses to a standstill, said the statement.
The Congress said the RBI was focusing on increased bank liquidity, but they are not facing the problem of money, but risk appetite.
“What did not happen during the 2017-2019 period of economic slowdown is being attempted during the pandemic situation,” alleged Congress.
“When the demand for goods and services has crumbled and is likely to remain benign more on account of fear than on account of lack of opportunities, instead of focusing on how to fuel the economy with demand, the RBI is focusing on increasing liquidity and the cost of funds benefits,” the party said.
The RBI on Friday said to curb bad loans and maintain banks’ capital adequacy, banks will have to maintain a higher provision of 10 per cent of all the accounts which have availed the moratorium on loan repayment till June 2020.
