Kolkata, Dec 10 (IANS) Reserve Bank of India (RBI) Governor Duvvuri Subbarao Thursday said capital inflows into India were in line with the country’s need and that there was no concern over the flows building asset price bubbles.
“The capital flows are in line with our requirements. We have already reversed the easing we had done in the external commercial borrowings (ECB) policy,” Subbarao told reporters.

“If there is an excess of capital flows, we will respond to the situation accordingly,” he said after a closed-door meeting of the RBI’s board of governors here that lasted nearly four hours.

“I cannot speculate what initiative we will take in future on this issue. We can’t also say the present situation is a capital surge like in 2006-08,” Subbarao, flanked by union Finance secretary Ashok Chawla and RBI deputy governor Usha Thorat, said.

The central bank had Wednesday brought back the price ceiling on overseas borrowings or the maximum rate at which Indian corporates can raise foreign funds, while stopping the practice of buyback of foreign currency convertible bonds with effect from January.

The cap on the cost of ECB was removed almost a year back when companies found it difficult to raise capital amidst a global credit crunch.