Bank on us: RBI governor Y.V. Reddy with Asian Development Bank moderator William Pesek at the 39th annual meeting of ADB in Hyderabad on Wednesday. (AFP)

Hyderabad, May 3: Reserve Bank governor Y.V. Reddy today said spiralling oil prices would not affect the overall GDP growth. He said the rising oil price was a matter of concern but would have no impact on the overall economic growth of the country.

He said Basel-II reforms were essential to speed up infrastructure development and attract investments. “However, Basel-II norms would be introduced in phases,” he added.

Reddy defended the micro finance system of funding village people. “It is good but needs to be effectively introduced in cooperation with local environments to yield better results,” he said.

Addressing a seminar on challenges and implications of Basel-II in the Indian context, Reddy said voluntarism and gradualism was the mantra for its implementation here.

“We have gone a step further than the Basel I requirement and have asked the banks to maintain capital charges for the market risks on their available-for-sale portfolio with effect from March 2006.”