CPSU Congress- Silver Jubilee Reflections

undertakings on the banking system. Even so, about one-third of the additional credit expansion for purposes other than food procurement this year (Rs 1,256 crores compared to Rs 840 crores last year) can be explained only by the fact that large industrial firms have once again managed to appropriate bank advances disproportionate to their legitimate requirements. The Reserve Bank could have prevented this had it wanted to do so by taking advantage of the seasonal decline in commodity prices and making the larger borrowers reduce their borrowings from the banks on the basis of a revaluation of their stocks of finished goods and raw materials.