Improve credit quality: RBI

Source: PTI

January 24, 2006 13:09 IST

Commercial banks were on Tuesday asked to improve credit quality by undertaking a segment-wise analysis and take steps to expand in those areas where credit demand is growing rapidly.

In the third quarter review of the monetary policy on Tuesday, Reserve Bank expressed concern about the credit quality in the expansion phase.

The Monetary and Credit Policy 2005-2006

"While strong credit growth, which is well diversified, is a reflection of greater credit penetration and investment activity, there are concerns about credit quality in the expansion phase," it said.

The recent trends in credit growth warrant a reiteration of these concerns. The central bank urged banks to comprehensively review credit quality with segment-wise analysis of activities.