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RBI Policy Review Credit Policy October 27, 2009

Governor of Reserve Bank of India is going to announce the policy review for this quarter. Although it is not likely that he would make any great change in Cash Reserve Ratio or Statutory Liquidity Ratio, as Prime Ministers Economic Advisory Council has already suggested that any change in key rates aimed to reduce the purchasing power of enterprises and individuals might not bring down the soaring prices of all the goods, commodities and services. In fact the deposit rates in the banks are at around 20 percent and credit rates are at around 14 percent.

Without, doubt there is too much money blocked idle  in the system and unlike 2007 there is not excess borrowing going on in the economy. Any adverse policy by RBI might result in shunting of the recovery process as there are many companies specially in Real Estate, Infrastructure and Capital Goods who are still struggling to get back into the growth trajectory.  People who want detailed information on RBI Credit policy can visit the official website of RBI and downlod the complete document.

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