M A I N   N E W S

Sops for senior citizens
Bank rate, CRR untouched

Mumbai, April 19
Projecting a 6-6.5 per cent growth, the RBI today left the bank rate and cash reserve ratio untouched, but gave interest rate sops for export credit and senior citizens and barred cooperative banks from exposure to stock markets.

Unveiling the 2001-02 credit policy, the Central Bank said it will provide adequate liquidity to credit growth, continue with a stable interest rate regime and keep a vigil on prices in a bid to spur economic growth.

As part of rationalisation of export credit refinance, the interest rates were being reduced to 1-1.5 per cent.

As a gesture to senior citizens, the policy suggests higher and fixed rate of interest compared to normal deposits of any size. Unveiling the monetary and credit policy for 2001-02, RBI Governor Bimal Jalan said that banks should continue with the present interest rate regime with a preference for softening to the extent the situation warranted within the overall framework of imparting greater flexibility in the medium term.

Following the pay order scam and the crisis faced by a few urban co-operative banks (UCBs), the Governor said it was necessary to stop entertaining any fresh proposals for lending by these banks directly or indirectly to individuals or corporates against security of stock to prevent any possible misuse in the future.

Supervisory body
Dr Jalan also suggested setting up of a new apex supervisory body which can take over the entire inspection/supervisory functions in relation to scheduled and non-scheduled UCBs.

The Governor, who had last week ruled out cut in the bank rate and cash reserve ratio (CRR), however, said no further changes were being proposed now but these would be announced as and when considered necessary.

As a gesture to senior citizens, the RBI suggested higher and fixed rate of interest as compared to normal deposits of any size. Meanwhile, CRR is to be made more flexible and interest on CRR balance increased.

The RBI now proposes to reduce the maintenance of daily minimum requirement of 65 per cent to 50 per cent for the first seven days of the reporting fortnight while continuing with the minimum requirement of 65 per cent for the rest of the fortnight.

This minimum requirement, however, will be applicable to all seven days, including the reporting Friday without any exception effective from August 11, 2001, in order to reduce the volatility in the call money market.

Reviewing norms relating to prime lending rates, the RBI decided to relax the requirement of PLR being the floor rate for loans above Rs 2 lakh.

Back-stop facility
The apex bank proposed changes in the standing liquidity facilities available to the system and introduction of “back-stop” facility.

The RBI has proposed splitting the standing liquidity facilities available from the apex bank into normal facility and “back stop” facility. The normal facility would be provided at the bank rate while the “back stop” through a variable rate linked with a repo rate/NSE-MIBOR.

Bihar poll violence leaves 21 dead

Patna, April 19
At least 21 persons were killed and many seriously injured in large-scale violence which marred the third phase of the panchayat elections in Bihar today even as nearly 65 per cent voters exercised their franchise.

State police headquarters sources said four persons were killed in Muzaffarpur district, three in Shekhpura, two each in Rohtas, Siwan and Bhojpur while one each in Samastipur, Jamui, East Champaran, Banka, Vaishali, Saran, Nawada and Nalanda districts.

One person was shot dead in group clashes under the Nagarnausa police station area in Nalanda district.

The sources said a candidate for the post of Mukhiya, Hare Ram Singh, shot dead another candidate, Suresh Kumar Singh, under the Gajranjganj outpost in Bhojpur district.

One person was killed in group clashes near polling booths numbers 72 and 73 under the Nokha police station area in Rohtas district. One person died in armed clashes between two criminal gangs in Rohtas district.

The sources said anti-socials shot dead Magistrate Rajbansh Singh at Simurtalla under the Jhajha block area in Jamui district. One person was killed in an encounter between the police and outlaws near polling booth 204 at Basrauha village in Nawada district. UNI