Highlights of Monetary and Credit Policy

The Reserve Bank of India on Tuesday announced the Monetary and Credit Policy for October 2004-March 2005.

Following are the highlights of Rbi's busy season Credit Policy:

• GDP growth pegged down to 6-6.5 per cent for 2004-05
• Inflation pegged upwards at around 6.5 per cent
• Money Supply (M3) growth to be 14 per cent in 2004-05
• Bank Rate unchanged at 6 per cent
• Repo Rate hiked by 0.25 per cent to 4.75 per cent
• Housing finance upto Rs 15 lakh (Rs 1.5 million) under priority sector
• Ceiling on NRE deposit rates hiked by 0.5 pc over Libor
• FCNR(B) deposit rates can be fixed monthly
• Minimum tenor of term deposits lowered to 7 days
• PSU banks asked to step up loans to small farmers
• Private banks asked to attain 20-25 pc growth in farm loans
• Loan limit for SSIs doubled to Rs 1 crore (Rs 10 million)
• RIDF fund of Rs 8,000 crore (Rs 80 billion) set up
• ]Minimum maturity of Commercial Papers lowered to 7 days
• Capital Indexed Bonds from next fiscal
• Market Stabilisation scheme ceiling at Rs 80,000 crore (Rs 800 billion)
• Time limit for export realisation for EOUs (Export Oriented Units) eased
• Forward contracts booking by exporters/importers eased
• New non-performing assets norms for financial institutions
• Asset reconstruction company's minimum capital up at 15 per cent of assets or Rs 100 cr (Rs 1 billion)
• Central Board of Direct Taxes allowed to refund upto Rs 25,000 through electronic claearing.