BOMBAY, Oct 9 : India, battling a foreign exchange crisis and 15.3 per cent inflation, announced a major credit squeeze, reports Reuter.

The Reserve Bank of India raised the bank rate by one point to 12 per cent and minimum lending rates for commercial banks by 1.5 points to a new range of up to ?0 per cent, effective immediately.

Given strong inflationary pressures — and the anticipated slowdown in the real GDP (Gross Domestic Product) growth rate, there is an imperative need lo bring about a significant slowdown in monetary expansion, the central bank said in a statement. It has forecast a slowing in GDP growth lo three per cent in 1991/92. (April-March) from five per cent in 1990/91.

India's Ihrec-monlh-old minority government has Initiated a radical overhaul of the. highly controlled economy Ip ease a crisis over Indias 72 billion Dollar foreign debt. It has said it alms lo make ihe Rupee freely convertible within three years.

Initial measures, including a

sharp Rupee devaluation in June, have boosted prices. Meanwhile, the World Bank' has said India needs to reduce its current account deficit to six billion Dollar in 1991/92 from an estimated 10 billion Dollar in 1990/91.

Announcing the moves, RBI Government S. Venkataraman lold a news conference he sought to spare exporters, planning a scheme to allow them access to foreign currency denominated credit.

Venkltaramanan said he expected to announce the scheme within two weeks but gave no further details.

An RBI statement detailing the rate rises, the second set in three months, also announced interest rate rises on new or renewed term deposits up to two years and curbs on many personal loans. It announced measures aimed at aiding exporters, including an easing of emergency cash margins on some export- linked imports and Increasccd Incentives to banks to extend credit to them. Banks have been asked to bring about a significant and enduring increase in the flow of credit lo the export sector, it said.

Venkataraman said of the squeeze, "1 am aware that this m^y affect production but 1 hope it will be offset by belter cash management and efficiency."