India Inc hails RBI's move to hold key rates - Chandigarh Tribune

India Inc hails RBI’s move to hold key rates

New Delhi, June 3

India Inc today said a cut in key rates by the RBI would have been propitious for growth, even as it hailed the central bank's move to slash statutory liquidity ratio (SLR), saying it will give more room to banks for onward lending to the corporate sector.

The industry also emphasised on supply-side interventions by the government to tackle persistently high food inflation.

"While we expect the government to attack food inflation through administrative and policy fixes from the supply-side, we would have appreciated the central bank facilitating a revival of capital expenditure cycle by exhibiting a softer stance on policy rates," Ficci president Sidharth Birla said.

Steadfast on his resolve of keeping inflation under check, RBI Governor Raghuram Rajan today left key rates unchanged and unlocked about Rs 40,000 crore of funds by reducing the amount of deposits banks are required to park in government securities.

It is a priority for the government to maintain a balance between growth and inflation ... It (RBI) has followed a calibrated approach aimed in the direction of balancing between growth and inflation Arun Jaitley, finance minister The decision to hold the rates reflects the current level of inflation as well as the expectation of policy and administrative actions from the government in the coming months to address inflation as well as boost growth Chanda Kochhar, icici bank ceo While we expect the government to attack food inflation through administrative and policy fixes from the supply-side, we would have appreciated the central bank facilitating a revival of capital expenditure cycle by exhibiting a softer stance on policy rates Sidharth Birla, ficci president CII recognises the concerns about inflation that have restrained RBI from reducing key policy rates but by easing liquidity in the system by lowering SLR it has ensured that funds would be available to the banking sector for onward lending which in turn would push investment and growth Chandrajit Banerjee, cii director general

"CII recognises the concerns about inflation that have restrained RBI from reducing key policy rates but by easing liquidity in the system by lowering SLR it has ensured that funds would be available to the banking sector for onward lending which in turn would push investment and growth," CII Director General Chandrajit Banerjee said.

However, Assocham president Rana Kapoor said: "While SLR cut by 50 bps will make available a little more money for lending by banks, the issue facing the industry at this point of time is not so much of liquidity but the cost of borrowing. With robust foreign inflows, the system has ample liquidity".

Bankers rule out cut in lending rates

Mumbai: Bankers on Tuesday said the RBI's decision to hold key rates, coming after a decisive mandate received by the Narendra Modi government, was on expected lines and interest rates won't change even though the central bank's SLR cut infuses additional liquidity into the system.

"This was very much on expected lines and what is important is the consistency which the RBI has shown in its moves, like the focus on the consumer price inflation number and a clear articulation of the guidance," Bank of Baroda CMD SS Mundra said.

Chanda Kochhar, who heads ICICI Bank, the largest private sector lender, described the policy as very "balanced" and "pragmatic", coming in the wake of the strong electoral mandate.

"The decision to hold the rates reflects the current level of inflation as well as the expectation of policy and administrative actions from the government in the coming months to address inflation as well as boost growth," Kochhar said.

Realtors seek reduction in interest rates

New Delhi: Expressing disappointment over the RBI's monetary policy, realtors body CREDAI on Tuesday sought cut in interest rates on home loan to boost housing demand.

The Confederation of Real Estate Developers' Associations of India (CREDAI) demanded a pro-growth stance on the policy rates for the development of housing sector.

"We at CREDAI appreciate the positive step taken by RBI to reduce SLR by 50 bps, which will release a liquidity of Rs 39,000 crore for the banks. "We understand the central bank's priority to fight inflation. However, at the same time real estate industry also awaits proactive measures to stimulate the home purchase by bringing down the home loan rate," CREDAI national president C Shekar Reddy said. — PTI