Reddy gets bullish, revises GDP to 7.5-8%
The monetary policy review has been a mixed bag. While home loans and personal loans are set to get more expensive.
By TNN |
MUMBAI: The monetary policy review has been a mixed bag. While home loans and personal loans are set to get more expensive, your bank deposits will get good returns.
Make no mistake. Mr Reddy is clearly bullish on growth, and has revised the GDP growth projection to 7.5-8% from 7-7.5%. What���s worrying him is the quality of loans ��� loans to builders, loans to buy stocks, personal loans and credit cards ��� causing fears of overspending and defaults. Bank loans are doubling in less than 3 years, and the growth is highest in 35 years.
Close to 60% of the incremental non-food credit is going to the services sector, led by commercial real estate and personal loans. ���We are advising banks to review credit quality and exercise greater control on credit,��� said RBI deputy governor Rakesh Mohan.
Mr Reddy, however, has kept the Bank Rate unchanged at 6%. He has also refrained from cutting the cash reserve ratio from 5% to release liquidity to the banks.
Make no mistake. Mr Reddy is clearly bullish on growth, and has revised the GDP growth projection to 7.5-8% from 7-7.5%. What���s worrying him is the quality of loans ��� loans to builders, loans to buy stocks, personal loans and credit cards ��� causing fears of overspending and defaults. Bank loans are doubling in less than 3 years, and the growth is highest in 35 years.
Close to 60% of the incremental non-food credit is going to the services sector, led by commercial real estate and personal loans. ���We are advising banks to review credit quality and exercise greater control on credit,��� said RBI deputy governor Rakesh Mohan.
Mr Reddy, however, has kept the Bank Rate unchanged at 6%. He has also refrained from cutting the cash reserve ratio from 5% to release liquidity to the banks.
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