Reserve Bank of India (RBI) Governor D. Subbarao on Thursday said the central bank is very conscious of the need to be supportive of economic growth.
Subbarao, who was speaking in Chennai, said the objectives of monetary policy are price stability, growth and financial stability.
The RBI Governor, while responding to Finance Minister P. Chidambaram's call to banks to pass on the benefit of rate cuts to customers, said it is important for banks to respond by cutting lending rates to attract investments.
He, however, admitted that some banks have done it and some have not.
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Subbarao also said that steps were being taken to manage volatility in the currency movement after rupee continued to slide
"We don't have an exchange rate target. We don't have exchange rate plan. We try to manage volatility in the currency movement, volatility very broadly defined, and we use also the instruments at our command. I have nothing more to say on that," he said, while ruling out any exchange rate target or plan.
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Subbarao also urged banks to lend more loans to eligible students.
"Responsiveness over the last two to three years that I have been monitoring has actually improved. So most students are now getting education loan but that is not good enough. In indeed all eligible students ideally should get education loans," he added.
Chidambaram had earlier this week said the RBI should not focus solely on containing inflation, but also look at the larger mandate of growth and creation of jobs.
