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Policy emphasis on growth

New Delhi, July 28: The RBI’s credit policy has stressed on economic growth, while urging bankers to go for another round of interest rate cuts, finance secretary Ashok Chawla said today.

“The policy suggests they are continuing with an accommodative monetary approach, so the clear message seems to be that growth is their main priority,” Chawla said, adding there was scope for further rate cuts by the banks.

“They (RBI) have no doubt talked about concerns regarding inflation, but as they have mentioned they will watch that. They do not see the need of reversing the accommodative and balanced policy they have been following so far.”

The State Bank of India said lending rates might not rise if there was ample cash in the banking system.

“It is a question of a balance between demand and supply. If the balance continues to be as it is now, with a positive bias towards liquidity, the interest rates may not go up,” said chairman .P. Bhatt.

Meanwhile, corporate India has sought a reduction in key rates to help revive the economy as it welcomed the central bank’s commitment to credit flow.

Ficci said a change in repo and reverse repo rates would have spurred investment.

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