SBI has no special provisions for doing business, says RBI

RBI has chided SBI chairman Pratip Chaudhuri for his statement on phasing out of CRR, saying that the State Bank of India is another commercial bank and it has to follow the regulations of the banking sector regulator to function in the country.

RBI deputy governor KC Chakrabarty said this while speaking to reporters on the sidelines of a financial conference on systemic risk, organised by the Great Lakes Institute of Management. He said the banks must work within the framework prescribed by the regulator.

''If the SBI chairman is not able to do the business in this regulatory environment, he has to find out some other place.''

The SBI chairman had recently said the CRR was a tool that only retarded lending and growth of the banking sector. ''CRR doesn't help anybody. While CRR is not applied to insurance companies, NBFCs and mutual funds that are also mobilising deposits from the public, it is unfairly put on banks'', he said (See: CRR a retrograde tool; must go: SBI chief).

Chakrabarty said SBI as the country's largest lender has a special responsibility to ensure that it did not fail and hence has to be more prudent in its operations.

He said any failure of the State Bank of India (SBI) would also affect other lenders and world risks a systemic failure.