Jamshedpur: Not hiking diesel prices could have led to suppressed inflation, State Bank of India Chairman Pratip Chaudhuri said on Friday. Diesel prices were raised by Rs 5 a litre on Thursday night.
The government had no choice but to increase the price of diesel because of the increasing loss incurred by the oil companies, Chaudhuri, who was in the steel city to take part in a function, said.
While the Indian Oil Corporation (IOC) had alone suffered a loss of Rs 24,000 crore in the last quarter, the figure was Rs 50,000 crore for the oil companies taken together, he said.
The SBI Chairman said the international oil price was also up and if diesel prices had not been increased, the country could have faced a suppressed inflation.
Chaudhuri also reiterated his suggestion to phase out Cash Reserve Ratio (CRR, saying it was not earning any interest to banks.
Stating SBI has about Rs 50,000 crore as CRR with the Reserve Bank, he said no country in the world had such a huge amount under this category.
Referring to the prevailing slowdown in the economy, Chaudhuri said inflation was a big challenge, which needed to be addressed urgently to accelerate growth.