Financial institutions enhance employment oriented credit: Reddy

Mumbai, Jan 29 (UNI) The Reserve Bank of India today urged financial institutions to expand the industrial credit to the employment intensive sectors.

Talking to mediapersons after announcing the policy review here, RBI Governor Y V Reddy said that the Apex Bank was prepared to support the initiatives for enlarging segment of bank's industrial credit.

He also sought intervention in other public policies to promote these initiatives.

Ephasising the issue of excess in liquidity inflows, Dr Reddy said that the banks need to undertake institutional and procedural changes for enhancing credit delivery to sectors that were employment intensive.

Dr Reddy said that moderation in the growth Industrial sector may further be explored to assess whether some of the segments were reflection correction of the accesses in the previous year or whether there were sector specific factors which required attention.

He articulated ''They should be proactive in extending credit to the industrial sector, taking it as a moral sanction.'' Referring to the banks demands for re-looking into some of the areas, he said that the RBI was prepared to look into the matter.

Dr Reddy called for a holistic approach by the policy makers to enhance the quality of flows and make the source of flows transparent, consequently promote more stable investment like pension and insurance funds.

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