Mid-term Review of
Monetary and Credit Policy for the year 2001-02
Highlights of the Mid-term Review announced by RBI Governor on 22nd October 2001 are:
RBI cuts Bank Rate by 0.50 percentage point, from 7.0 per cent to 6.50 per cent to touch its lowest since May 1973.
RBI reduces CRR by 2.0 percentage points from 7.50 per cent to 5.50 per cent, releasing on additional liquidity of Rs.6,000 crore to banks. RBI also removes most of the exemptions available on CRR.
Interest rate paid on eligible CRR balances increased further to the level of Bank Rate i.e. 6.5 per cent (from 6.0 per cent since April 21, 2001 and 4.0 per cent earlier).
Monetary Policy stance to continue as in the first half of the year.
In view of global uncertainties, a projection in the range of 5.0 per cent to 6.0 per cent growth rate for 2001-02 considered reasonable for monetary management.
Measures to strengthen financial system to continue.
RBI provides operational flexibility to banks in "Loan System" for credit delivery.
RBI initiates steps to closely monitor non-SLR investments by banks and FIs.
RBI Current Account Facility being rationalised.
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