The risk weights on housing loans extended by banks to individuals, were also increased from 50 to 75 per cent in December 2004. The provisions for standard assets were also revised upwards progressively in November 2005, May 2006 and January 2007, in view of the high credit growth in select sectors. These measures stood us in good stead during the global financial crisis.
While these developments bear watching, some of this sluggishness seems to be the result of transitory factors, including unusually severe winter weather, labor disruptions at West Coast ports, and statistical noise. The available data suggest a moderate pace of GDP growth in the second quarter as these influences dissipate.