Finance minister P Chidambaram said, "Monetary policy takes some time to work, it would have a favorable impact on bringing down inflation. The minister also said that the increase in provisioning requirement to 2% from 1% by the central bank for loans to real estate, capital market, personal loans (excluding housing) and against credit cards would provide comfort to the house owners. "It is along expected lines," he said.

When asked whether this would put pressure on interest rates, Chidambaram said that interest rate is just one "small part of the cost of industry". "I hope the industry and business will continue to go with their investment plans," he said.

Stressing that banks should moderate credit growth, the minister said that borrowing requirements of productive sector must not be hindered. Chidambaram, who is slated to hold a review meeting with the chiefs of public sector banks on February 5, will discuss the issue at length. "I intend to meet public sector bankers to see that there is no shortage of credit for the productive sectors," he said.