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

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

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