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New Delhi, July 29 The Finance Ministry on Tuesday said that banks could ensure availability of adequate credit to productive sectors if requests for loans were carefully appraised and credit was allocated prudently.

This view of the Government comes amidst apprehensions that banks would take a cue from Reserve Bank of India’s latest policy rate hikes and curtail credit flows to productive sectors as part of their attempts to moderate credit growth, having regard to the need to moderate aggregate demand.

In a statement issued here soon after the RBI’s first quarter review of monetary policy, the Finance Ministry said that it expects the measures taken by the central bank to help in moderating and containing inflation.

The RBI had on Monday said in its first quarter review of macroeconomic and monetary developments that “potential inflationary pressure from international food and energy prices appear to have amplified and by current indications are likely to remain so for some time”.

The Finance Ministry pointed out that RBI’s measures announced on Tuesday were consistent with this conclusion made in the first quarter’s review of macroeconomic and monetary developments.

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