Amazed how few people understand this. Even professional bankers and so many so called long term banking system investors talk about one of the myths all the time as reason for low deposit issues
Sir the FPIs have been selling consistently & that results into Lower money in the system is that a Cause of lower deposits. Means the person who is selling is a foreign entity & hence deposit is not being created in India
NIce video. I didn't understood one thing, how is elevated LDR signify to consumer low confidence, if their deposit are not used to give loan (loan given is new money created), then how does elevated LDR signal to them that bank might not be able to give back your deposit. If a bank has 100 people who have deposited, bank never used those 100 deposit to give loan instead bank created money on fly when giving loan, that means they will always be able to take back their money, then why maintain this LDR ? Neelkanth and sameer could you help with this question?
When the RBI buys dollars, it sells rupees. This is "new" money ie it's not previously existing in the banking system. This money subsequently goes and sits in some bank account thus adding to the supply of money. Conversely, when the RBI sells dollars, it "buys" Rupees which comes out of some bank account and goes out of the system
Amazed how few people understand this. Even professional bankers and so many so called long term banking system investors talk about one of the myths all the time as reason for low deposit issues
Wonderful conversation and insights.
Thank you Mr.Misra I have learnt a lot from you. Best Communicator
Very educative video ❤❤❤
Reverse repo is not at 6.25% it is the SDF( Standing deposit facility) at 6.25% it works similar to reverse repo but without collateral requirement
Very informative, thank you!
Sir the FPIs have been selling consistently & that results into Lower money in the system is that a Cause of lower deposits.
Means the person who is selling is a foreign entity & hence deposit is not being created in India
NIce video.
I didn't understood one thing, how is elevated LDR signify to consumer low confidence, if their deposit are not used to give loan (loan given is new money created), then how does elevated LDR signal to them that bank might not be able to give back your deposit. If a bank has 100 people who have deposited, bank never used those 100 deposit to give loan instead bank created money on fly when giving loan, that means they will always be able to take back their money, then why maintain this LDR ?
Neelkanth and sameer could you help with this question?
Great conversation 👌
Extremely loaded conversation. Towards end, i guess each statement/sentance is worth one lecture to understand. Very tired 😂
Ultimately one has to see, whether there is DEMAND of credit is growing and bankers refusing the loans. Thats the crux
Economics is so much of calculus with a very large no. of variable's, often interconnected.
So, Double dilemma for RBI. They need to reduce repp so more liquidity means higher inflation, which is already high.
How does withdrawal of dollar lead to shortage of rupee in the system? I didn't get that part.
When the RBI buys dollars, it sells rupees. This is "new" money ie it's not previously existing in the banking system. This money subsequently goes and sits in some bank account thus adding to the supply of money. Conversely, when the RBI sells dollars, it "buys" Rupees which comes out of some bank account and goes out of the system