1. You Are At:
  2. Home
  3. Business News
  4. RBI Waits For Banks And Corporates' Quarterly Advance Tax

RBI Waits For Banks And Corporates' Quarterly Advance Tax

Mumbai, Jun 6: The Reserve Bank of India (RBI) expects the new marginal standing facility (MSF) to be tested during the tight liquidity period next week, when banks and corporates pay their quarterly advance tax."Every

PTI [ Updated: June 06, 2011 19:46 IST ]
rbi waits for banks and corporates quarterly advance tax
rbi waits for banks and corporates quarterly advance tax

Mumbai, Jun 6: The Reserve Bank of India (RBI) expects the new marginal standing facility (MSF) to be tested during the tight liquidity period next week, when banks and corporates pay their quarterly advance tax.


"Every quarter it (advance tax) happens. I don't think there is anything different in that. A new type of liquidity management facility has come, so it will be tested," RBI Deputy Governor, K C Chakrabarty, told reporters on the sidelines of an event here today.

If, however, a problem arose, the system would have to adjust itself, he said.

The apex bank had introduced the MSF while unveiling the annual monetary policy, stating that banks can borrow upto one per cent of their total deposits from the Reserve Bank under the MSF facility at a rate which is 100 basis points higher than the short-term lending (repo) rate.

Expressing concern over banks whose profits dipped drastically after their Chairmen left, Chakrabarty said "books should not be as per the minds of the chairman, reporting should be as per books."

There is a need to improve both the standard of reporting as well as that of examination, he said.

"We have to improve the standard of reporting, the standard of examination. If in financial reporting you are not able to bring in the integrity, then how will you do it in non-financial reporting--that is the issue," he said, adding this issue is a matter of "concern".

Chakrabarty's comments come at a time when the country's largest public sector lender State Bank of India's Q4 (January-March 2011) profit dipped 99 per cent to Rs 20.8-crore after the new Chairman took over.

When asked if RBI was also responsible for the reporting problem, he said, "we are all collectively responsible. The issue is what goes wrong and how do we improve the system...I don't think standard has any problem. Integrity of information is a problem, not the standard," he said.

On black money, the RBI Deputy Governor said that existence of black money reduces scope for development and is a cause of concern. PTI

Write a comment

Live Scorecard