The Hindu Business Line : Assocham seeks reduction in PLR

THE Associated Chambers of Commerce and Industry of India (Assocham) has called for reduction in prime lending rate (PLR) from existing 10-12 per cent to 6 per cent for exporters and 8-9 per cent for domestic borrowers.

In addition, the Chamber has also sought a substantial hike in credit-deposit ratio, besides seeking increased credit disbursement to agriculture and small & medium enterprises sector.

Submitting its suggestions for the annual Monetary and Credit Policy statement 2005-06, the Assocham President, Mr Mahendra K. Sanghi, demanded that since exporters bring in substantial foreign exchange, the RBI should take a policy decision so that credit is extended to them at the PLR, ranging in and around 6 per cent.

As regards to domestic borrowers, the PLR rate should be brought down within a range of 8-9 per cent to make them competitive and leverage them from risk taking.

Mr Sanghi pointed out that PLR in the country ranges between 10-12 per cent, which is very high as against the prevalent PLR rate in the overseas market which is restricted at a level of less than 2-3 per cent.

According to him, the higher PLR rates render the domestic industry including its exporters uncompetitive vis-à-vis their counterparts in overseas market.

Assocham has further suggested that to encourage exports, pre and post-shipment finance rate be around 6.5 per cent and small exporters be helped to avail of foreign currency loans with Libor + rates.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
To meeet priority sector lending targets — Foreign, new pvt banks move to buy out farm loans from PSBs

BoI helps farmers spot income avenues

Rupee slips; gilts up

RBI directs NBFCs to ensure full cover on public deposits

Centurion Bank gets shareholders' nod to raise Rs 600 crore

`Time for global banks to take cue from Indian peers'

Syndicate Bank chief urges officials to take bank to greater heights

PNB distributes Rs 3 cr loans at Palakkad

Wipro completes Corpn Bank order

Assocham seeks reduction in PLR

BoB shifts Rs 8,450-cr G-Secs to HTM basket

Cut-off price for bonds

PSB revises NRE, FCNR (B) deposit rates

State Bank to pay $8 million for stake in Mauritius bank