Gopalan for tighter RBI policy

With food inflation at a 16-month high, there was a need to further tighten the monetary policy, Financial Services Secretary R Gopalan said.

“I share the views of experts that some amount of tightening is required,” Gopalan told reporters on the sidelines of the 116th foundation day of the Punjab National Bank.

Gopalan said the Reserve Bank of India (RBI) would have to strike a balance between growth and inflation while deciding on monetary policy.

“RBI will certainly take inflation into account (in the policy review). It is for RBI to decide how to do it (control inflation) and what instruments to use,” he said.

Gopalan said the credit policy statement might also have some mention of new banking licences for non-banking finance companies and private companies.