CRR - GOD Help PSU Banks !

State Bank of India (SBI) Chairman Pradip Chaudhuri said: “I still hold that CRR is a waste for the economy.”

What! When he is talking about the CRR it is the depositors’ money. The bankers today feel that the depositors’ money is an asset which can be used to make profits instead of keeping it safe in the bank.

CRR (cash reserve ratio) is the amount of funds that the banks are required to keep with the RBI. Which means that the bank cannot loan out the entire deposit, but have to keep something as reserve!
This reserve should help cushion the impact of immediate withdrawals. These immediate withdrawals can happen in festive season or can happen during an emergency or a natural calamity. But the RBI keeps the depositors’ interest in the vanguard and hence accentuates the need of CRR.

If the SBI chairman comes out with such a statement it leaves the depositors’ with nothing else but a sense of panic and gloom

GOD HELP PSU BANKS, when they think that the depositors’ money is something that can be risked at, to make more money. One of the classic examples is the Kingfisher Airlines (KFA). The airlines today is burdened under a debt of Rs 7,000/- crores and guess what, who’s the major lender …. SBI.

It’s time to think and reconsider whether money deposited with PSU banks is really safe!