No easing, just teasing, from RBI chief Subbarao

MUMBAI Tue Sep 4, 2012 3:16pm IST

1 of 2. Reserve Bank of India (RBI) Governor Duvvuri Subbarao attends an annual monetary policy review meeting in Mumbai May 3, 2011.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

MUMBAI (Reuters) - The Reserve Bank of India (RBI) Governor Duvvuri Subbarao has a penchant for springing surprises.

He often opts for the unexpected when it comes to monetary policy reviews, recently disappointing those looking for a cut in interest rates, and on Tuesday he cracked a joke that took a bunch of news-hungry reporters and market players for a ride.

Before beginning his speech at one of the country's largest and most prestigious banking events, the Reserve Bank of India chief said in a serious tone that he had something to announce.

He then declared that he had appointed a committee to debate whether to do away with the cash reserve ratio (CRR), the portion of deposits that banks are obliged to set aside with the RBI.

Subbarao was referring to a recent public spat between RBI Deputy Governor Keshab Chandra Chakrabarty and Pratip Chaudhuri, chairman of the country's largest lender, State Bank of India, who has argued for the CRR to be abolished.

"The members of that committee are Dr. Chakrabarty and Pratip Chaudhuri," Subbarao said, keeping a straight face.

"Both of them will be locked up in a room, will not be released until they have reached a conclusion, and the timeframe is that they will not submit their report before my term as governor is over."

The audience broke into laughter.

However, some reporters at the meeting didn't immediately get the joke, and sent news alerts on a possible end to CRR that sowed confusion in the bond market.

"Though there was no market impact, the market later realised and appreciated the governor's sense of humour," said one dealer at a foreign bank in Mumbai.

After his speech, a reporter asked Subbarao if his comment was just a joke. He smiled, and said: "What do you think?"

(Reporting by Neha Dasgupta and Shamik Paul; Writing by Suvashree Dey Choudhury; Editing by John Chalmers)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Diesel Deregulation

Diesel Deregulation

Oil ministry to seek Cabinet nod on diesel deregulation - sources  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage