New Delhi, Oct 15 : The Reserve Bank and the government today agreed to take measures immediately to infuse liquidity into the system.
"RBI Governor D Subbarao will work out the details of the measures agreed upon between the government and the central bank," said Finance Minister P. Chidambaram.
I expect to be able to make a statement later in the afternoon, he added.
RBI Governor D Subbarao last evening called on Prime Minister Dr. Manmohan Singh. P. Chidambaram was present at the meeting.
The Prime Minister reviewed the financial situation, with particular reference to the liquidity position. The developments in, and measures taken by, other countries, were also reviewed.
During the meeting, the Finance Minister said that it was felt that inter-bank lending still remains constrained and it is necessary to overcome these constraints.
The meeting also observed that the banks were able to access only Rs.3,500 crore from the special window of Rs.20,000 crore opened by RBI for providing liquidity to mutual funds;
The meeting also took note of the fact that the banks were able to access only Rs.3,500 crore from the special window of Rs.20,000 crore opened by RBI for providing liquidity to mutual funds.
The meeting noted that is important to ensure that credit flows to borrowers within the sanctioned limits of term loans and of working capital; and that it is also important to enhance the credit limits where borrowers require more credit.
The meeting also observed that the inter-bank call rate was between 9 and 9.1 per cent on Tuesday and the bank accessed approximately Rs 62,500 crore through liquidity Adjustment Facilities.