New Delhi: Reserve Bank of India (RBI) will continue with the dovish monetary policy stance till demand picks up in the economy, RBI deputy governor K.C. Chakarabarty said.
Quoting RBI governor D. Subbarao, the deputy governor said: “The RBI will maintain an accommodative stance until demand conditions improve and credit flow takes hold, but reversing the expansionary policies is definitely on the agenda on the way forward.”
“This is quite logical and reasonable,” Chakrabarty said, adding: “We are not very clear whether recovery is complete or not.”
Speaking about the small and medium enterprises (SME) sector, the deputy governor said that the current environment for SME is very good because everybody is looking at the local market.
“SME has a very great opportunity and they must seize the opportunity then only we will be able to go back to 8% growth,” he said after inaugurating SME Forum here yesterday.
Expressing satisfaction over loan disbursal to the sector, he said that enough credit flow has taken place in the last 2-3 years.
Asked if RBI could further extend the timeframe for debt restructuring, the deputy governor said that the global crisis came all of a sudden.
“Some industry, therefore, require support like NPA rehabilitation and the scheme continued till March 2009,” he said, adding, things have improved.