RBI, the banker’s bank

Recent rate cut by RBI which was aimed at lowering down interest rates seemed to have no effect on bank’s lending sentiments. They are risk averse and any mindless lending without business sense will only add up to NPAs. RBI is a facilitator and not the economy initiator. RBI’s repeated rate cuts will not have desired effect if there is no demand. Govt has done pretty little to boost demand and boost consumer confidence. RBI is the guardian of banking regulations and norms. It should act to make banking safer and to make them more reliable and creditable. Banks are fast loosing public confidence. Instead of propagating Central Govt’s policies it should ensure that Banks do not indulge in unsafe credit and bury themselves in fresh load of NOAs. Let the lever of economy be handled by free market forces and prudent Govt’s policies.