Lauding the Reserve Bank’s move to cut its short-term lending rate by 50 basis points to 6.75%, Indian industry yesterday called upon commercial banks to transmit the lower interest rate to borrowers.
“FICCI is looking forward to a faster transmission by banks as this would give a boost to the much-needed investment and consumption demand in the economy,” Federation of Indian Chambers of Commerce and Industry president Jyotsna Suri said in a statement.
“We are equally encouraged by RBI’s statement that the policy stance will continue to be accommodative and that it would work with the government to ensure that impediments to banks on passing on the policy rate cuts in the form of lower lending rates would be removed,” she added. Confederation of Indian Industry director general Chandrajit Banerjee said: “Exports from the country have been falling sharply, resulting in low capacity utilisation across sectors. In this scenario, investments cannot be expected to pick up without a significant reduction in interest rates.”
“The corporate sector will now be in a better position to drive a recovery in investment and growth,” he added. Associated chambers of Commerce and Industry of India (Assocham) secretary general DS Rawat said RBI governor Raghuram Rajan had delivered a Diwali bonus.
“As much as 125 bps interest rate cut has been announced since January this year. The ball is certainly in the court of the banks, which must now rise to the occasion,” he said in a statement.
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