The RBI has room to reduce interest rates, but it will do so prudently and judicially, the central bank Governor Shaktikanta Das said in an interview to CNBC-TV18 Awaaz.
He said an RBI panel would review the performance of the monetary policy committee (MPC) and the effectiveness of their decisions in managing the inflation target.
On the loan restructuring scheme, Das said the framework for resolving COVID-hit loans had been taken with great thought. He said RBI had considered the interests of banks, depositors and businesses.
Businesses were facing a lot of stress, and their failure would lead to loss of jobs. To minimize job losses and ensure that banks were repaid, it was important that the businesses were saved, he said.
Within the resolution framework, banks could decide on which borrowers deserved to be given a helping hand, he said.
Das said the real estate sector should be a key beneficiary of the loan restructuring scheme, though it was tough to say how many of the loans would be restructured.
On privatisation of public sector banks, Das said it was for the government to decide. He said the RBI will take a view on privatisation of PSU bBanks only if its views are sought.
RBI has formed an internal working group to review ownership of private banks, and will take a view on the issue after the final report is submitted in September, Das said.
On the cap on CEO tenure at private banks, Das said the RBI would examine all suggestions and take a view.
He said the macro environment was too uncertain to give a clear GDP forecast. The RBI has already given guidance that growth would be negative in FY21, and it would start giving estimates once there was more clarity, he said.
On rate cuts, Das said the RBI was ready with both conventional and unconventional steps.