Stability with a positive bias for growth is the essence of the policy.
A careful reading of the policy statement will indicate that it maintains the feel-good factor by speaking about the a GDP growth of 6.5 to 7 per cent with an upward bias, annual rate of inflation in the range of 4 to 4.5 per cent with a possible downward bias and maintaining adequate liquidity in the system and indicating the preference for softer interest rates.
The policy, while noting the reduction in interest rates on corporate lendings and loans to housing, mentions that no noticeable reduction has taken place in rates in respect of other segments.
It also emphasises the need to strengthen credit delivery to small and medium enterprises, infrastructure and agriculture and to nurture a conducive credit culture among financial intermediaries, corporates and households.
Within banking system an atmosphere is to be created to encourage officials to take risks while borrowers need to be sensitised to honour commitments to lending institutions.
The central bank also cautions banks to sharpen their risk assessment techniques to guard against any adverse impact on credit quality.
It is heartening to note that in spite of the strengthening of the rupee, India
