NEW DELHI: State Bank of India Chairman Pratip Chaudhuri criticised Reserve Bank of India and also stated that the higher interest rate regime is not proving helpful in controlling high inflation.
Chaudhuri said at the bankers' press conference after RBI unveiled its monetary policy review, “Today's inflation is cost push and not demand pull and trying to address that with higher interest rates in not helpful.”
Earlier, the RBI left the interest rates unchanged and also hinted at not taking any action until the first few months of next year. Banks, mainly state-owned ones, were hit after Reserve Bank of India
(RBI) also rose the amount of provisioning against restructured assets for sector to 2.75% from 2% as part of the monetary policy review.
By maintaining the repo rate at 8%, the central bank defied pressure from different quarters such as government, India Inc for bringing downward revision in rates.
RBI slashed the cash reserve ratio by 25 basis points to 4.25 per cent. This move would lead to infusion worth Rs 17,500 crore into the banking system.