Credit Planning

It is a tool for Macro Management of Credit

To regulate the Expansion in the overall quantum of funds to a desired level

To direct flows of funds to desired Sectors

Process

At the bank level

1.   The bank is required to prepare realistic annual credit budget incorporating estimates of volume and growth

2.   Then it is submitted to RBI between May/June every year

3.   The budget is revised every year based on credit policy banking trends and so on

4.   There is Monitoring and implementation of the budget.

5.   Direct credit allocation, credit rationing , credit authorization and fixation of inventory,credit norms and credit planning have been diminished after the introduction of this policy of liberalization and de regulation