Jaipur: Defending its monetary policy of tightening the liquidity in the market by hiking key rates over the last few months, RBI Governor D Subbarao said on Thursday that the Central bank is ready to compromise with a lower growth rate for checking runaway inflation.

Speaking on the sidelines of the Board of Directors meeting here, Subbarao said the double- digit inflation rate is above the comfort zone and despite several fiscal measures it is continuously rising.

Indicating the worsening financial condition of power companies in Rajasthan, Subbarao asked the power companies to draft fresh proposals and assured that RBI will arbitrate with the banks to provide financial assistance to them.

Taking a stringent stance over the circulation of fake currency in the country, Subbarao asked the banks having daily transactions of Rs 50 lakhs and above to install fake currency detector machines by 2012. 

Speaking in context of Rajasthan, he said that the central bank is working in direction of connecting every village with various banking services and make the people financially literate.

“3, 883 villages in the state with more than 2, 000 populace will be connected with banking services by March 2012,” Subharao informed.

By the year end, RBI will come out with plastic bank notes of Rs10 denomination and would follow it up with plastic notes of other denominations.

In an attempt to make the general public financially literate the governor urged the inclusion of finance related programmes and study materials in the school syllabus.

JPN/Bureau