Union Finance Minister Nirmala Sitharaman recently discussed the challenges the garment and knitted fabric sector in Bangladesh is currently encountering, expressing optimism that the interim government of Bangladesh will promptly address the issue to safeguard India's investments in the region, particularly those originating from Tamil Nadu. Sitharaman emphasized the importance of ensuring the safety of investments made in good faith and highlighted the increased exports from Bangladesh as a positive outcome of these investments.
During a post-budget press meet with Reserve Bank of India (RBI) Governor Shaktikanta Das in New Delhi, Sitharaman urged banks to introduce innovative and attractive schemes to encourage deposit mobilization. She highlighted the essential relationship between deposits and lending, noting a discrepancy where deposits are trailing behind lending activities, leading smaller investors to explore alternative options like the stock market. To address this imbalance, she stressed the necessity for banks to revamp their deposit account offerings and narrow the gap between deposits and loans, focusing on core functions such as mobilizing deposits and providing financial assistance to those in need.
RBI Governor Shaktikanta Das reiterated that interest rates were deregulated, allowing banks the freedom to determine their interest rates independently. He shared concerns about the deposit-lending mismatch within the banking sector, prompting banks to rely more on short-term non-retail deposits to meet the escalating credit demand, potentially posing liquidity challenges for the banking system. Das encouraged banks to focus on attracting household financial savings through innovative products and services, utilizing their extensive branch networks effectively to enhance mobilization efforts.
Finance Minister Sitharaman also distanced the government from the Economic Survey's proposal to exclude food from inflation targeting, emphasizing a different stance on the matter. This move indicated a distinct perspective within the government regarding economic policies and strategies outlined in official publications.