Monday, February 9, 2009

Bank credit growth rate is in good health: RBI

Date : Feb-07-2009 13:04
The Reserve Bank of India on Feb 6 said that the credit growth in the banking system is good and the lenders need to enhance their disbursals of loan to the productive sectors to support the growth.

RBI Deputy Governor Usha Thorat said, we are seeing a growth in credit. RBI has cut its rates and taken other steps to improve the liquidity conditions in the system ... there is a need to ensure adequate credit flow to priority segments. We need to see how things pan out. Apart from this, she also said rather than relaxing the NPA norms, the banks should be given time to restructure their MSME (micro, small and medium enterprises). Along with this, the banks need to ensure the credit quality while lending.

The RBI in order to improve the liquidity along with to ease the bank lending rates has slashed its the CRR to 5 per cent followed by repo rate to 5.5 per cent and reverse repo rate to 4 per cent, since October. The monetary actions by RBI were intended to the ensure adequate credit-flow to productive sectors, Thorat said. Besides this, she also said that the banks need to enhance their operations in the rural sector.

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