Most of the NBFCs do not take public deposits but that does not mean they cannot create systemic risks. The banking system has at least Rs 57,000 crore exposure to IL&FS. Haven't the banks invested public money in IL&FS papers, asks Tamal Bandyopadhyay.
The US market regulator Securities and Exchange Commission was doing what it could to stem the flow. It temporarily prohibited naked short-selling in the securities of major financial players including Freddie Mac and its sister firm Fannie Mae in July. But this didn't really help. It was only after global central banks pumped in unprecedented liquidity into global markets, that the storm was finally calmed.
For those, like me, who backed the Reddy-Mohan approaches to monetary and regulatory policies, the continuity shown by Subbarao's RBI is very heartening. For earlier critics of these approaches there may be some disappointment and discomfort.
Fix India's real estate sector. Fix India's public sector banks, advises Tamal Bandyopadhyay.
A 2008-style bank run seems unlikely, but if it did happen, the sector is much better prepared.
'These are interesting days for watchers of English cricket and central banking,' points out Amol Agrawal.
PS banks need to pull up their socks to improve cash flows.
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