Reserve bank governor D. Subbarao announced the annual credit policy. It was in line with expectations. It raised the key rates by 25 basis points. Another major point is that the run for banking licence for private players now become active. RBI will announce it’s guidelines for the same at it’s first quarter review.
As stated the major concern is inflation. RBI believes that the rate hike will curb inflation. Which is at 9.9 percent for March 10. After the credit policy the renewed rate structure will be the following:
CRR-6%

(which will wipe out Rs.12,500 Cr from the market, and will be effective from April 24,2010).

Repo rate-5.25%

Reverse Repo-3.75%
Central bank predicts that in FY 2011 country will grow at a rate of 8 percent. In FY 2010 the growth rate will be 7.2 (which itself is decent).
After the Goldman Sachs problem and restrictions on reality loans in China global indices tanked a lot. Indian indices followed the trend. But after the policy announcement Indian market came back in style. Buying interest seen in Reality and Banking sector. The inflation estimate by March 2011 is at 5.5 percent. Hard work in all respect is needed to achieve this goal.
Credit policy aims at growth (in a sustainable manner) but there are more shocking figures came out recently. It is 10 crore more Indians are living in poverty than in 2004. Now 37.2 percent of India’s total population lives in poverty. From 2004 onwards the UPA government rules the country. They have been more kind top the rich and the ultra rich. Their policies favored the market but poverty increased. This RBI policy, I don’t think, will address this issue. So more policy changes are needed on an urgent basis. Growth, without considering the common man, is a failure.

Repo Rate
Whenever the banks have any shortage of funds they can borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from RBI.

Reverse Repo Rate
Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks.

CRR Rate
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.

SLR Rate
SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers.