Chhaproh (Una),(H.P): Reserve Bank of India Governor D Subbarao on Tuesday said inflation rate is still at unacceptable levels and efforts should be made to rein in prices further to provide relief, especially, to poor people.
"In the last two years, we have been able to bring down the rate of inflation but I admit that inflation is still high and it should further come down.
"Inflation should be brought down to provide relief (especially) to poor (people)," Subbarao said while addressing the gathering at 'Outreach Programme' to make people aware of banking services.
Rising prices, he said, had affected one and all and that it was one of the bank's priorities to contain it.
"Inflation has risen in the last few years, and prices of almost everything have gone up. Inflation has affected everybody but it has affected the poor people most," he said.
Later talking to media here, Subbarao said he was of the view that Rs 5 per litre diesel price hike would raise inflation rate in the short run.
"In short term, increase in diesel prices might cause inflation... In the long term, it (price hike) is good for economy including for inflation," Subbarao said.
On a query on plastic notes, Subbarao said the RBI was in the process of importing polymer notes which would be introduced on pilot basis. "We are in the process of negotiating the contract of importing of Rs 10 polymer notes and introduce them on pilot basis. I cannot say how long it will take...But hopefully it will be soon".
Earlier during his speech, RBI Governor said he had received complaints about shortage of coins and soiled mutilated notes in rural areas and asked the commercial banks to help the RBI in resolving this problem.
The apex bank Governor also raised concerns over the problem of fake currency in the country and asked the police authorities to be vigilant to curb this menace.
"Fake currency is also our problem. Some of anti-social elements are indulging in these fraudulent activities. It is our effort to root out the fake currency from the monetary system," he said.
Subbarao also termed offering appropriate lending and deposit rates to public as a challenge for commercial banks.
"It is a challenge for banks that depositors should get suitable rate of interest and borrowers should be charged less lending rates. (And) banks should become capable in this regard," he said.
Subbarao also asked banks to push adequate banking facilities in villages to enable more and more people to avail the same.
On fake RBI letters seeking bank accounts details from people, Subbarao cautioned people against falling prey to such fraudulent practice. "Do not believe in such letters using names of RBI. People who send these letters want to have access to your bank account details and misuse the money from their account holders”? Subbarao said.
First Published: Tuesday, September 25, 2012, 19:56