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October 22, 2001
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Credit Policy bold and pro-growth: Sinha

Finance Minister Yashwant Sinha on Monday described the Reserve Bank of India's monetary and credit policy as "bold and pro-growth" and said it would infuse much needed liquidity in the markets.

"The RBI has come out with a forward looking policy for the next six months. Overall, the credit policy announced by RBI is pro-growth and it is now up to trade, industry and government to play their part," Sinha said welcoming the policy.

Sinha told reporters that the decision to cut bank rate by 50 basis points and cash reserve ratio by 2 per cent would make available about Rs 60 billion additional funds to banks for lending.

It is for the first time that CRR has been brought below 6 per cent. This will increase liquidity and lendable surpluses with banks, he said.

The finance minister expected that the impetus given in the RBI policy would result in growth rate on the higher side of the band projected by the Central bank.

Sinha also said it was up to the banks to cut interest rates now. "I am given to understand that the largest bank, State Bank of India is looking at a deposit and lending rate cut.

"I would, however, continue to insist on banks reducing transaction cost," he said.

The Monetary & Credit Policy

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