On economy
* India may return to 8% plus GDP growth trajectory in the medium term.
* 8% plus GDP in medium-term depends on infrastructure, farm sector and fiscal consolidation.
On external stability
* Economy may face lower net foreign exchange inflow causing strain on liquidity.
* Overall, India may still record net foreign exchange inflows in FY09.
* Foreign exchange rate volatility will be "greatly accentuated" from mid-September onwards.
* RBI and government are taking steps to meet the shortfall in rupee and foreign exchange liquidity.
* The current account gap is modest despite widening trade deficit.
* The current account gap is modest on high private transfer and service sector export.
On banking sector
* It suggested that government should exit the monitoring function of PSU banks which is unrealistic now.
* The cost of recapitalisation of banks by government is relatively low versus other nations.
* Capital needs are likely to increase to maintain the credit growth momentum.
* Capital need from government assessed as manageable if the credit growth is within 25%.
* The committee may consider merging banks on borderline of 51% with banks with high government stake.
* The merger should have positive synergies and should complement regional spread.
On bank margins
* Banks' sub-BPLR loan have risen to 76% in March 2008 versus 27.7% in March 2002.
* Banks' net interest margins have not declined sharply despite more sub-BPLR loan.
* Stable NIM with high sub-BPLR loan suggests issues of transparency in operations.
Aggressive banks
* Credit risk on banks' capital position is relatively muted.
* More reliance on volatile liabilities like bulk deposits to fund asset growth.
* Higher dependence on bulk deposits leading to higher asset-liability mismatch.
* RBI may consider capital charge if banks' dependence on "purchased liquidity" is high.
On Statutory Liquidity Ratio (SLR)
* Any cut in SLR should factor-in the pressure of government spend and fiscal gap.
* SLR norm for banks helps in smooth conduct of govt borrowing programme.
* SLR cut could lead to banks buying illiquid and low quality asset.
On corporate bond market
* Need to allow short-selling of different money market securities in a phased manner.
* Allowing AAA-rated corporate bonds to be repoable should be considered.
* Opening corporate debt market to FIIs may raise financial stability issues now.
* Collateral like AAA paper for LAF may be explored over time.
* As FCAC takes place, more disclosure needed for FIIs to invest in gilts.
* Committee not in favour of term liquidity facility as existing tool is adequate.
On other issues
* The broader consensus is that a fuller rupee float is desirable.
* The migration to fuller rupee float should be gradual.
* Capital account convertibility must be concomitant with external sector balance.
* There will be some reversal in low debt-equity ratio on decline in companies’ valuations.
* Infrastructure deficit binding is a constraint on India’s growth.
* Rapid capacity additions is key to maintaining high growth with price stability.
* India could not resume fiscal correction to maintain GDP at reasonably high level.
* It is necessary to return to fiscal prudence at both central and state government levels.
* Development of an active corporate debt market is critical to attract private capital.
* There is an urgent need to develop corporate debt market to address funding need of NBFCs.
Government holding in PSU banks as on December 2008:
| PSU Banks | Holding |
| PNB | 57.80% |
| SBI | 59.41% |
| Indian Bank | 80% |
| BOB | 53.81% |
| Union Bank | 55.43% |
| IOB | 61.23% |
| BOI | 64.47% |
| IDBI Bank | 52.68% |
| OBC | 51.09% |
| Andhra Bank | 51.55% |
| Vijaya Bank | 53.87% |
| Dena Bank | 51.19% |
| Syndicate Bank | 66.47% |
| UCO Bank | 63.59% |
| Canara Bank | 73.17% |
| Allahabad Bank | 55.23% |
| Central Bank of India | 80.20% |
| Bank of Maharashtra | 76.77% |
| Corporation Bank | 57.17% |
| State Bank of Bikaner | 75% |
| State Bank of Mysore | 92.33% |
| State Bank of Travancore | 75% |
