Mumbai: Reserve Bank of India governor Bimal Jalan on April 29 expected inflation and liquidity to be comfortable, growth to be higher and no change in interest rates barring unforeseen circumstances in 2002-03.

"Call money rates at 6.1 per cent is less than bank rate and the average inflation rate is less than four per cent and we feel the present environment situation is sustainable for next six to eight months," Jalan told reporters after presenting the Monetary and Credit Policy for 2002-03.

Interest rates should be considered on real term rather than on nominal term over a period of time, he said adding, "we will like to move towards a more flexible interest rate regime".

Jalan said two priorities were taken into consideration in the policy - to support availability of credit and pursue financial sector reforms. Referring to the availability of credit, he said supply was plentiful while demand was poor.

Jalan said the policy has steps to make access to credit easier for small scale industries (SSI), housing finance and allied services as a part of priority sector lending.

On the financial reforms, he said the focus has been on transparency, increased accountability and improve asset-liability management practices.

Without naming the co-operative bank in the recent controversy in alleged misappropriation in government securities, the governor said, "we want to develop the G-sec market but if somebody goes and burns his fingers by violating all norms, what can be done about the burnt fingers?"

PTI