The Hindu Business Line : Apex chambers hail RBI move

New Delhi, Nov. 1 Leading industry bodies today hailed the Reserve Bank of India (RBI) move to cut repo rates, cash reserve ratio (CRR) as well as the statutory liquidity ratio (SLR).

At one go, the central bank has applied itself to the multiple issues of liquidity shortage, high cost of funds, depreciating rupee and systemic risks which is faced by the mutual funds and the NBFC sector, said the Confederation of Indian Industries (CII).

The CII Director General, Mr Chandrajit Banerjee, said “these are timely steps coming on the back of a sharp increase in the overnight lending rates.”

“We hope that the banks will now follow the signal from the RBI and lower lending rates,” he said.

Describing the steps taken by the RBI on Saturday as positive, the President of the Federation of Indian Chamber of Commerce and Industries (FICCI), Mr Rajeev Chandrasekhar, said that, “We believe these should have come at the same time as the first set of liquidity initiatives and could have saved some time and sent a much stronger signal.”

“Rates must come down further and liquidity must increase even more significantly and faster,” Mr Chandrasekhar said.

The Associated Chamber of Commerce and Industries (Assocham) is also of the view that the RBI move to cut repo rates by 0.50 basic points and one per cent cut in CRR and SLR will infuse liquidity in the system and lead to reduction in interest rates.

“With today’s RBI move not only the interest rates would subside but enough liquidity would come into the market to help India Inc expand, diversify and modify its plans,” said the Assocham Secretary General, Mr D.S. Rawat.

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