Welcoming extension of bank’s refinancing facilities to mutual funds, non-finance banking and housing companies by relaxing maintenance of SLR upto 1.5%, ASSOCHAM was expecting that the premier bank would have also brought down cash reserve ratio, repo rate and reverse repo rate by at least 100 basis points which did not happen.
In a statement, the ASSOCHAM President, Mr. Sajjan Jindal said that the need of hour is that Indian Inc. needed money at relaxed interest rates which could have been possible provided RBI had not maintained status quo in its cash reserve ratio, reverse repo rate and repo rate.
The demand creation and liquidity availability is still an issue but will remain so until interest rates are further moderated, said Mr. Jindal welcoming that the RBI extended bank’s re-finance facilities to provide liquidity to mutual funds, non-finance banking and housing finance companies by relaxing maintenance of SLR upto 1.5%.
Mr. Jindal, however, added that the ASSOCHAM concurs with RBI’s assessment that India’s GDP would not exceed 7% in current fiscal in view of slowdown and also agreed with the premier bank that the inflation will fall to 3% by March 2009 since prices of essential commodities, crude oil and metals have started coming down heavily.
Source: ASSOCHAM
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