Why RBI Credit Policy is important?

Reserve Bank of India (RBI) Annual Policy Statement for the year 2008-09 announced on 29th April 2008.

We all know that RBI Credit & Monetary Policy directly impacts the banking and financial sector which include banks, financial institutions, NBFC’s, primary money market dealers and dealers in forex markets etc.

RBI Credit Policy also affects individuals & corporates. If RBI's policy results in tightening of money supply it affects borrowers more as banks become strict in lending. Also at times banks resort to increase in lending rates. However in such scenario depositors generally gain by increased deposit rates.

Main objective of RBI credit policy is to control inflation, ensure adequate supply of credit to encourage growth of the economy and maintain financial stability. If RBI policy today is able to even partly achieve the above objectives it will be for the good of all.