Stating commodity prices have increased, RBI governor D Subbarao on Wednesday asserted that fighting inflation is the top priority and even invoked the promise printed on currency notes, a remark that could further dash hopes of a rate cut later this month.
To specific questions on the possibility of a rate cut, Subbarao, however, told reporters that he did not want to speak on the issue as of now. Anything about this will be known on January 29 monetary policy review report, he added.
"Controlling inflation is our most important work," he said while addressing an outreach programme of the central bank at Lalpur Karauta village in Barabanki.
Prices of almost every commodity, specially edibles and cloths, have registered an increase and inflation has affected every section of society, particularly the poor, he said.
"In the last two years, we have been successful in controlling inflation to some extent, but I admit the rate is still high. To control inflation is and will remain our priority," he said.
"If you see the currency note, it is printed on it that 'I promise to pay the bearer the sum of Rs 100' and it has my signature as the RBI governor. What does the promise and signature means. It means that the RBI will control inflation and maintain its purchasing power," he said.
Subbarao said financial inclusion was an important developmental programme of the RBI.
"There are around six lakh villages in the country, but only 60,000 have banking facilities. There are 90% villages which do not have banks," he said.
"This is unfortunate that the people in these villages are not getting benefit of banking services," he said.
He said that the RBI's target was that every household in the country has a bank account.
"Therefore, I request all the banks that they should achieve this tough target at the earliest," he said.