Reddy Zeroes In On Credit Delivery, Pricing & Culture

 Leaving interest rates unchanged and not injecting any fresh liquidity into the economy, Reserve Bank of India Governor Y V Reddy in his first monetary and credit policy (2003-2004) turned the spotlight on the need to ensure adequate credit flows to small businesses and the agricultural sector at the right price.  Reddy, in effect, shifted the focus of the credit policy from the creation and management of liquidity to the delivery of credit.  Reddy told Business Standard in an interview that with so much of global liquidity coming in and with flows expected to continue for some time, there was at the moment no need for a fresh infusion of domestic liquidity.  However, the RBI will announce tomorrow a set of new market instruments aimed at better and a more refined management of liquidity.  The RBI has raised its expectations of gross domestic product (GDP) growth this year to 6.5-7 per cent from the 6 per cent it projected in April.