Tuesday Dec 31, 2024
Tuesday Dec 31, 2024
Tuesday, 29 September 2015 01:26 - - {{hitsCtrl.values.hits}}
Central Bank Governor Arjuna Mahendran yesterday said that they did not want private sector credit growth to increase further as it had accelerated significantly during the first half of the year.
The y-o-y growth increased to 21% in July compared to 19.4 % in June 2015. In absolute terms, it is an increase of Rs. 40.9 billion in July compared to Rs. 55 billion in June.
“At present, the credit growth is somewhere around 15% to 166%, already starting to correct, so I think the macro-prudential measures and the currency adjustment will come in handy. Now of course we are approaching levels where we do not want to see much more growth because after Christmas is over we must stabilise things,” he said.
He said the growth of credit to the private sector is expected to return to the desired path in response to policy adjustments and also as a result of the base effect.
“I think the distribution of credit should become more effective. I want to pump more credit into the regions. We have some Central Bank facilities like Saubhagya and Poverty Alleviation Micro Finance Project (PAMP), which is refinanced by the Japanese and we want to aggressively push that now,” he noted.
Elaborating on the importance of access to finance, Mahendran said: “We have appointed five new heads for the regions and next month we are going to come up with a credit plan where we will talk to every bank and finance company to reach out to those provinces. We will give these institutions targets and we will underwrite it with a Central Bank guarantee.”
