The industry and banks have hailed the 25 basis point cut in the repo rate and Cash Reserve Ratio.
While the lending institutions feel that this will help ease the tight liquidity in the system, the seeker of finance thinks that this will help ease the pressure on the borrowing cost.
Who will say ‘no’ to cheaper finance or lower rates? The industry obviously will expect more and this is exactly what the knitwear exporting community too is looking forward to.
While welcoming the RBI’s decision on the 25 bps cut, Tirupur Exporters’ Association President A. Sakthivel said that the industry was actually expecting a 50 bps cut in interest rate.
Knitwear exporting units are currently under financial pressure due to various issues. “We expect that this announcement would make all banks reduce their base rate without delay to support growth and survival of the ailing industry,” he said.
Meanwhile, a section of individuals, mostly senior citizens were seen rushing to the bank to enquire if this would have an impact on the deposit rate.
Bankers received a number of telephone calls from the start of business hours today. “While corporates called to ask if we will be effecting a cut in lending rate, enquiries from individuals were mostly about a cut in deposit rate,” maintain bankers.
People, mostly senior citizens, who prefer to keep away from the market and bet safe on bank deposit were more anxious than others.