Slowing growth is 'most worrisome': RBI

Slowdown in growth is the most worrisome factor and volatile capital flows have made the country vulnerable to "stops and reversals", the RBI Governor D. Subbarao said on Thursday. The RBI Governor, however, said the growth outlook for the current fiscal is relatively optimistic, helped by measures taken to ease the supply bottlenecks.

"The slowdown in growth is the most worrisome factor as industrial activity is stubbornly subdued and services remain below the trend," Dr. Subbarao said in his foreword to the seventh Financial Stability Report released by the RBI on Thursday evening. Even as RBI is estimating growth to improve to 5.7 per cent the governor pointed out that overseas bodies like the IMF and the World Bank have also given an optimistic forecast.

Gold import norms further tightened RBI took still more measures to curb demand for gold, saying imports of the precious metal against suppliers' or buyers' credit will be on 100 per cent cash margin, and on document against payment basis, in an effort to rein-in a record-high current account deficit. These measures will also apply to gold imports on an unfixed price basis with immediate effect, a RBI notification said on Thursday.