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April 29, 2002 | 1300 IST
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Highlights of the Monetary and Credit Policy

Following are the main points of the Reserve Bank of India's Monetary and Credit Policy for the financial year, which started on April 1, released on Monday:

RBI Governor Bimal Jalan

The RBI announced a 50 bps cut in CRR to 5% from June 15. The bank rate has been left unchanged for the moment, but may be cut later by 50 bps.

  • Growth rate in 2002-03 projected at 6.0 to 6.5 per cent. Inflation to remain low.

  • Monetary conditions and liquidity position highly comfortable.

  • RBI to provide adequate liquidity to meet credit growth and support investment demand.

  • Soft interest rate regime to continue and greater flexibility to interest rate structure in the medium-term.

  • Bank rate may be cut by upto 50 basis points depending on monetary developments - no timing fixed yet.

  • No change in interest rate on savings account.

  • Interest rate on export credit in foreign currency lowered.

  • Abolition of minimum lending rate for co-operative banks.

  • Banks to declare maximum and minimum lending rates.

  • Banks should provide information on deposit rates on various maturities and effective annualised return to depositors.

  • Facilities for small scale industries liberalised.

  • Further measures to improve credit delivery mechanism to priority sector.

  • Measures to improve flow of credit to housing sector.

  • Further measures to develop government securities market.

  • Access to call money market to be regulated.

  • CDs to be issued in demat form.

  • More prudential measures to bring financial stability.

  • Measures to improve technology - EFT facilities to be expanded.

  • Real time gross settlement system to be ready for testing in a year's time.

  • Submission of returns by NBFCs: RBI to penalise delays.


The Monetary and Credit Policy 2002-2003
The Rediff Budget Special

Business News