Bank deposits safe, Economy strong

[sajiv]

NEW DELHI: Unfazed by the global financial crisis, Finance Minister P Chidambaram today asserted that fundamentals of the Indian economy are strong and that savings in banks are 'completely safe'.He admitted there is a liquidity crunch in the market and that the economy was facing 'spill over and ripple effects' of the global storm but assured the country that the RBI was ready to take further steps and infuse more liquidity if necessary.

Chidambaram was confident that the country can weather the storm and appealed to all the players in the economy to cooperate with the government in the task. He told, "Investors should not act in haste or panic, says local banks well capitalized, regulated."The Finance Minister added, "The weekend is a good time for people to reflect. Firstly, those who have money... There have been wage increases for the government servants, and many have received Diwali bonuses. Those who have money should spend some money and should save some money. Savings in banks are completely safe. Our banks are well regulated and well capitalised. Depending on your risk threshold you can save in some other instruments. Someone with a low risk threshold should save in a bank," he said.

The Finance Minister's remarks assume significance in the backdrop of a crash in the stock markets, led by bank scrips, that prompted RBI to cut Cash Reserve Ratio by 100 basis points to release about Rs 40,000 crore in addition to Rs 20,000 crore unlocked on Monday.However he added that the industrial output numbers not very satisfactory, and was confident that the economy would continue to grow.