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Chidambaram hopeful of increased credit flow

Describing the credit policy as forward looking, Finance Minister Palaniappan Chidambaram expressed the hope that it would lead to improved credit flow with reduction of lending rates.

''I hope with the busy season credit policy the credit flows will be easier,'' Chidambaram said in New Delhi.

He further called upon banks to rise to the occasion and meet the genuine credit needs of industry. ''The ball is squarely in the court of the banks.''

The finance minister stated that credit flow during the period ended October 10, 1997, has been Rs 112.52 billion as against Rs 25.37 billion during the corresponding period last year. ''However, industry still feels there is a choke in credit flow.''

Chidambaram said the credit policy has given special attention to the needs of the housing sector. ''It has also addressed the requirements of the small-sector industry supplies, and special attention has been paid to the retail trade,'' he added.

Finance Secretary Montek Singh Ahluwalia also expressed similar views and described the policy as path-breaking.

"It is a very good policy and will help achieve the objectives laid down by the government. The softening of interest rates and reduction in cash reserve ratio would help in releasing lendable resources for the industry," Ahluwalia said.

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EXTERNAL LINK:
The Reserve Bank of India busy-season credit policy

UNI