RBI seeks farm sector credit information from banks

April 29th, 2008 - 8:46 pm ICT by admin  

Mumbai, April 29 (IANS) The Reserve Bank of India (RBI) has sought credit information from banks on their lending in the agriculture sector, expressing concern over the the diversion of funds for hoarding food grain for higher profit. RBI Governor Y.V. Reddy, addressing media after announcning the credit policy here, said: “The Food and Agriculture Organisation’s (FAO) global food price index has made a quantum leap by 40 percent in 2007 and this relentless upward curve has continued in the first quarter of 2008. This trend has created ripples in the world food stock as well as money market, which has fallen to its lowest level in 25 years.”

Emphasising the need to gain information on hoardings, he said in the global food grain market, prices of major crops such as wheat, corn and soya beans have increased from 60 percent to 85 percent by April 25, 2008.

Reddy added: “The price-rise is obviously a response to the surging demand.”

After gathering the necessary information, the apex bank will zero in on the erring banks to track down the diversion of funds, he said.

He noted that an interesting development is taking place in the international economic scenario between the national regulation and financial globalisation. The need of the hour is to moderate financial globalisation.

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