MUMBAI: Reserve Bank of India governor Shaktikanta Das on Wednesday said that the tax cuts on fuel were a positive development and would help the central bank meet its inflation target of 5.3%. The governor said that the growth target of 9.5% also looked achievable, however, there were headwinds in the form of global development. The governor said that there was already a rebalancing of the liquidity in the money markets but, as long as the central bank maintained its accommodative stance, funds would be surplus. “Prices of energy, steel and commodities have gone up but there is a sense among some analysts that they have peaked. We expect that it will be in line with our projection of 5.3% as positive developments emerging from petrol/diesel cut have not been factored in,” he said. He was speaking during a fireside chat in a banking summit organised by a business daily. Das, however, cautioned against global developments. “Global headwinds are coming up. Growth in most developed and advanced economies, which was positive until second quarter, seems to have moderated. Global growth of 5.9% target may undershoot because of shortage of semiconductors and shipping containers. Freight charges and commodity prices have gone up. Covid seems to be a rising concern in some countries in Asia and the West,” said Das. On retail loans overtaking corporate loans for the first time, Das said that banks need to price risks properly and decide on the extent of exposure they want to take in each sector. “What percentage should go for retail and housing is for bank boards to decide and allocate risk pricing,” said Das. Pointing out the growth in home loans, Das said that this was a combination of the increased demand for large homes because of the pandemic, coupled with the record dip in interest rates. At the same time, Das said that the shift of corporates to the bond market was a positive development. “Over the last one year, corporates have accessed more funds from the bond market than bank funding. That is a positive development. When they go to the market, the market will decide the risk and price the bonds. So far as bank credit is concerned, our interactions show that there are signs of investment pick-up,” he said. He added that his feedback from interactions with banks was that credit will pick up from next year. On the withdrawal of the liquidity infused during the pandemic, Das said that the measures were designed for a finite period and the liquidty would be rebalanced. He said that the money released from reduction in cash reserve ratio has come back and part of the long-term repo operations money has also returned. The RBI was impounding little below Rs 7 lakh crore through its reverse repo window. “So, the liquidity is getting rebalanced. As long as the policy stance is accommodative, liquidity will be in surplus, but the excess liquidity will be rebalanced,” he said. Das said that despite the expansion of the RBI balance sheet, the need for capital infusion into the central bank was “kind of a situation that will not arise”. Das again cautioned against cryptocurrencies and said that the investor base number in India was exaggerated. “Crypto, whatever name you call it, is a serious concern from the point of view of macroeconomic and financial stability. How the issue is to be dealt with, we have given recommendations to the government. Yes, in terms of volumes and amount invested, the number is growing. But the number of investors, the sense I have, I am not sure of the numbers being quoted,” said Das.