PM offers assurance regarding the situation of Banks

Author: Anurag Bhullar

PM Manmohan Singh said on Monday that the nation should be prepared to face the temporary phase of economic slowdown but assured that the deposits in PSUs and private sector banks are absolutely safe. He denied the possibility of failure of any of these banks owing to being enough capitalized and operating within strict regulatory conditions.

However, having said this, he accepted that investors need to be very cautious in the turbulent phase as stability and liquidity are the ‘treasured possession’ these days. He also admitted that global financial instability has affected the confidence of market players tremendously and chances of an extended recession do exist. But the Government, together with the central bank, RBI is engaged in correcting the situation to the extent possible.
	He went ahead to say that the precise determination of the effect of this crisis is difficult because of un-clarity in both the time period (for which this can last) and scale of the chaos. However, measures to increase liquidity are being taken but a matter of greater concern is to make this get converted into actual credit. The attempts have paid too, as inflation underwent a dip recently and is expected to go down further. The steps aim to get back to the growth rate of 9%.