RBI could have done more

Markets were expecting a double bonanza from RBI in its review of monetary policy on January 24, 2011 — a cut in both the CRR and repo rate. RBI has delivered a cut in the CRR but refused to budge on the rate front. Apart from policy announcements, RBI has lowered the GDP growth projections for 2011-12 from 7.6 per cent in October to 7 per cent now. The lowering of non-food credit growth projections will help public sector banks consolidate their balance sheet, in view of the high incidence of NPAs observed in the recent past.

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