Finance Minister P. Chidambaram today held a closed-door meeting here with top bankers to take stock of the situation in the wake of rupee volatility and to study ways to shore up foreign capital to bridge the widening current account gap.

The Minister, who will also be meeting foreign institutional investors, whose money is key to funding CAD, in the afternoon, did not speak to presspersons waiting outside.

Chidambaram was accompanied by his top officials, including Economic Affairs Secretary Arvind Mayaram, and Financial Services Secretary Rajiv Takru, while the bankers who met the Minister included SBI’s Pratip Chaudhuri, ICICI Bank’s Chanda Kochhar, HDFC Bank’s Aditya Puri, Pramit Jhaveri of Citigroup India, Vijayalakshmi Iyer of Bank of India, Canara Bank chief R.K. Dubey and StanChart India’s Anurag Adlakha, among others.

The meeting assumes importance as it comes against the backdrop of the continuing flight of capital, especially after RBI put restrictions on capital withdrawal by corporates and individuals last week, which triggered concern among overseas investors that the Government was on the verge of a throwback to the early 1999 crisis, when stiff capital controls were imposed due to the balance of payment crisis.

The FIIs, who have pulled out over $12 billion since May 22 after the US Fed hinted at scaling down its bond buyback sooner than expected, has had a debilitating impact on the rupee, which plumbed to a low of 65.56 to the dollar on Thursday.

The current plight of the rupee, which is the most bruised Asian currency, losing nearly 20 per cent since the beginning of the fiscal, has been mostly attributed to the high current account deficit, which stood at 4.8 per cent last fiscal and is likely to be higher in Q1 as well.

“The meeting was mainly to seek ideas and suggestions on what can be done about capital inflows. It was a very good and positive meeting,” Kochhar told presspersons after the meeting.

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