Mumbai: The government has revised the annual credit off-take targets as
high interest rate combined with the Reserve Bank''s directions to banks have squeezed
credit availability to certain sectors like real estate and automobiles.
will take a realistic view on scaling down credit target of PSU banks for this
fiscal if the banks feel that targets are not achievable," financial services
secretary Vinod Rai said.
sector banks had projected a 20-25 per cent growth in credit in fiscal 2007-08.
Major banks, including the State Bank of India and Punjab National Bank, have
already reported slowdown in loan disbursals.
has asked the government to revise its business target downward by 7-9 per cent
to 16-17 per cent since the agreed targets are not achievable.
per RBI''s own admission, non-food credit growth has declined to Rs63,258 crore
as of October 5 against Rs1,05,437 crore during the same period last year.
fear a further slow-down in credit growth if RBI decides to hike their credit
reserve ratio in its half-yearly review of monetary policy due on October 30.
the RBI to raise CRR limit by at least 25 basis points to manage the liquidity
in the market.
former RBI governor Bimal Jalan has said the Reserve Bank should not do anything
that might make the economic fundamentals of the country uncomfortable.
is an inflow of funds and RBI has to reconcile different objectives... but nothing
should be done to make things uncomfortable," Jalan said on the sidelines
of a conference on micro-finance.
RBI is facing a tough task of keeping the economic growth going while keeping
inflationary pressures under control. Foreign institutional investors (FIIs) have
so far this year pumped over Rs60,500 crore into the country''s equity markets,
which are on their peaks, he said.
rupee is trading below the Rs40 a dollar mark, putting pressure on the margins
slowdown in inflation to 3.42 per cent for the week ended September 22 has, meanwhile,
fuelled expectations of a cut in interest rate by the central bank during its
half-yearly monetary policy review.
also see : General
reports on Economy