RBI has asked all core investment companies investing in joint ventures or subsidiaries or representative offices overseas in financial sector to obtain require prior approval from the central bank
Finance Minister P Chidambaram said that irrespective of NPAs going up or down, the loan recovery should be made in a respectful manner
Citing steep moderation in growth and expressing optimism that inflation will cool off from the next quarter, the RBI governor said the central bank would take into account the growth-inflation trajectory and calibrate monetary policy accordingly
Kolkata: Reserve Bank of India (RBI) Governor D Subbarao has hinted at easy monetary regime in the coming days, citing steep moderation in growth and expressing optimism that inflation will cool off from the next quarter, reports PTI.
"We are expecting that inflation will trend down starting the fourth quarter. As we go into our mid-quarter policy on 18th December and the quarterly policy on 29th January, we will take into account the growth-inflation trajectory and calibrate our monetary policy accordingly," he told reporters after the central board meeting of RBI.
He, however, said 7.5% inflation is still high, though it has come down from its peak.
He further said: "Growth has moderated certainly. Growth has come down from 8.5% and 6.5% in the last two years respectively to 5.5% and 5.3% (in the last two quarters)."
RBI is always trying to manage the balance between growth and inflation, he said, adding that fall in growth to 5.3% in the last quarter is a steep moderation.
The headline inflation was 7.45% in October.
After two revisions, the RBI had projected the year-end headline inflation at 7.5%. In the beginning of the year, it had pegged inflation at 6.5%.
At the last credit policy announcement on 30th October, RBI had left the key rates unchanged at 8%. Expressing disappointment, Indian Finance Minister P Chidambaram had said that if the government had to walk alone on the growth path it would do so.
In the October monetary policy review, Subbarao had also said that "there is a reasonable likelihood of further easing in the January-March quarter."
While growth has taken a massive beating, inflation is still much above the RBI's comfort level of 5%, despite 13 successive rate hikes between March 2010 and October 2011.