ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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SURVEY OF INDUSTRY-Why a Credit Council is Necessary

Why a Credit Council is Necessary Arthagnani THE IDEA of a Credit Co-ordination Council mooted by the Chairman of the State Bank in his annual statement to shareholders has met with opposition from commercial bankers and, judging from newspaper reports, even the Reserve Bank has not reacted favourably. Explaining his suggestion, the State Bank Chairman had said: "the essential task of credit control should be viewed in the light of co-ordinating more effectively the credit mechanism with the planning mechanism ., . this important task may appropriately be tackled through a Credit Council composed of representatives of commercial banks, Planning Commission and industries ... in the recent past, the distribution of credit between the industries has not been proportionate to their levels of production. Selectivity in credit control should mean that this kind of maladjustment could be avoided". The main function of the Council thus would be to distribute credit according to the requirements of Plan targets, economic policy and levels of production. The task is a vital one and so the proposal deserves to be examined carefully.

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