For the past many months banks have been parking about Rs 6-7 lakh crore on a daily basis with the Reserve Bank of India (RBI) for an overnight period for just 3.35 percent interest. The move has drawn a lot of criticism.
Experts are questioning bankers as to why they aren’t lending this capital as loans? Why are you parking it for such a low interest rate? We do know how the Indian banking system works, and how money is created, but experts are now raising concerns over the move by banks.
They say bankers are risk averse and this is lazy banking. CNBC-TV18’s Latha Venkatesh analyses why banks aren’t lending and rather parking these funds with RBI.
Watch the video for more.