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

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Active Policy for Slack Season

'Active' Policy for Slack Season A Correspondent writes: THE Reserve Bank has given broad directions to commercial banks as to how they should keep the slack season 'active'. According to the Bank's press note issued on Thursday, banks have been asked to continue the policy of giving full support to the productive sectors of the economy while exercising restraint on credit to sectors where inflationary or speculative pressures are in evidence. Further, the need for increasing bank lending in States where banks find their credit-deposit ratio to be lower than the national average has also been stressed. To meet these ends, unlike in the past when banks were advjscd to deploy their surplus funds in the slack season in Treasury Bills (which were encashed to release resources during the busy season), the Reserve Bank would now prefer banks to put more of their funds in securities, particularly bonds floated by bodies tike electricity boards, land mortgage banks, State transport and finance corporations, etc. Banks are thus expected to give a further impetus to the revival of the economy and be able to expand credit in those parts of the country where the pace of development has been slack.

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