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

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THE ECONOMY-Cocking a Snook at Credit Policy

THE ECONOMY Cocking a Snook at Credit Policy (By a Special Correspondent) EXPRESSING his concern at the (high rate of expansion of money supply in the first half of the fiscal year 1978-79, the Reserve Bank Governor had told bankers in November 1978 that "the information given by banks as to why such rapid expansion occurred has not been adequate to provide any satisfactory rationale". He had pointed out that the high degree of liquidity in the banking system in the first half of 1978- 79 had led banks "to adopt an attitude conducive to very liberal extension of credit, especially to the big borrowers". there was a further surge in bank credit and money supply on the eve of the busy season of 1978-79 and the Governor had emphasised to the banks that "the first imperative of monetary policy at present is to contain the credit expansion potential during the rest of the financial year". With this objective, two measures were taken

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