The Reserve Bank of India (RBI) on Thursday eased the liquidity coverage ratio norms by allowing banks to account for up to two percentage points more of government securities, held in their statutory liquidity ratio reserves.
To discuss how the RBI's decision would impact State Bank of India, CNBC-TV18 spoke with its Managing Director PK Gupta.
"The RBI notification will help infuse more liquidity and especially help create room for some of the banks that have tight liquidity situation but for SBI per se, the bank is comfortable with liquidity position and there is no need to use this dispensation," said Gupta.
“Some of the banks in the market will probably be able to make use of this dispensation and borrow a little more from the RBI window or maybe even sell some of the bonds which they are holding outside the HTM, which they need to maintain for purpose of LCR,” said Gupta.
When asked about the SBI redeeming Rs 15,000 crore of investments in MF, Gupta said what the bank had done was not unusual. “Some temporary liquidity is parked in MF every quarter and at end of the quarter all those investments are called back. This happens every quarter,” he explained.
He also clarified that within SBI there is no rethink in terms of whether the bank should lend or not lend to NBFCs. "If there was a proposal that met the credit standards, the bank would look at it."
Talking about Aadhaar linkage with bank accounts, he said, "There are two aspects, one is that Aadhaar as OVD for the purpose of KYC. Two, is linking of Aadhaar to bank accounts. However, these are two mutually exclusive things."
Have you signed up for Primo, our daily newsletter? It has all the stories and data on the market, business, economy and tech that you need to know.