The measures taken by the Reserve Bank of India (RBI) have saved the country's economy from slump, and inflation is no more a concern, reports the Business Standard, quoting bank deputy governor, Rakesh Mohan.
He said that the financial system had ample liquidity and the apex bank was absorbing over Rs.1-lakh crore from banks through the reverse repo window under the liquidity adjustment facility (LAF). The country's banks were burdened with a huge amount of resources, as the credit growth moderated since late last year. He said that all banks were well capitalized.
The deputy governor noted that when the bank credit grew at 25%-30% between 2004 and 2007, there was no corresponding spike in the non-performing assets of banks. He hoped that the country would be back on its 9% growth track in five years from now when he would return to the country after a stint in Stanford.
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