Rethinking the Statutory Liquidity Ratio (SLR) in Indian banking

by Harsh Vardhan.

The CEO of a leading bank recently caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR). RBI has promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking . . . → Read More: Rethinking the Statutory Liquidity Ratio (SLR) in Indian banking

The two escape routes away from domestic formal-sector finance

Three problems afflict formal-sector finance in India today: capital controls, taxation, and financial policy. The most important financial products traded in the formal sector in India — the stock market index (Nifty) and the exchange rate (the rupee) — are under enormous pressure as a consequence.

One dimension, that has been emphasised in the . . . → Read More: The two escape routes away from domestic formal-sector finance

Did the Indian capital controls work as a tool of macroeconomic policy?

Ila Patnaik and I wrote a paper titled Did the Indian capital controls work as a tool of macroeconomic policy?

The abstract of this paper reads: In 2010 and 2011, there has been a fresh wave of interest in capital controls. India offers an interesting setting for assessing the usefulness of capital controls. It has . . . → Read More: Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?

The extent to which reform of the capital account is or should be irreversible

One important part of capital account decontrol is commitment. If there is risk that capital controls will be brought back in the future, this can have a variety of unpleasant effects. If there is a fear of fresh restrictions coming in on inflows, a surge of money will rush into the country. If there . . . → Read More: The Extent to Which Reform of the Capital Account is or Should be Irreversible