A+| A| A-
The Squeeze May Work
The seasonal credit expansion, which at the Rs 320-crore mark on February 24 was considered by the Reserve Bank to be somewhat more than warranted by the availability of goods touched the Rs 420-crore mark on April 24 without any tangible corresponding improvement in the supply of goods. By March 31—the close of the fiscal year which brings about a rush for tax payments—credit expansion will have crossed the Rs 420-crore mark. And, according to available data, banks, and mainly the State Bank, increased their borrowings from the Reserve Bank by Rs 23 crores to Rs 140 crores during the week ended March 31.
The seasonal credit expansion, which at the Rs 320-crore mark on February 24 was considered by the Reserve Bank to be somewhat more than warranted by the availability of goods touched the Rs 420-crore mark on April 24 without any tangible corresponding improvement in the supply of goods. By March 31—the close of the fiscal year which brings about a rush for tax payments—credit expansion will have crossed the Rs 420-crore mark. And, according to available data, banks, and mainly the State Bank, increased their borrowings from the Reserve Bank by Rs 23 crores to Rs 140 crores during the week ended March 31.
The credit squeeze announced on April I was, therefore, only to be expected. Of the approximately Rs 420 crore credit expansion, banks were required to extend 20 per cent to the trade and 80 per cent to industry and export sectors.
Dear Reader,
