New Delhi, Jun 17 (KNN) The Reserve Bank of India today again let the industry down by refusing to cut policy key interest rates and overlooked deceleration in growth which is a result of low investment and slowdown in consumer demand.

The MSME sector is particularly burdened with high cost of servicing loan while banks have resorted to selling off mortgaged assets after publishing pictures of entrepreneurs in newspapers who could not repay debt.  

Amidst hopes of at least 0.25 percentage point reduction in the policy interest rates, known in jargons as the Repo rates, the RBI has not altered the key rates disappointing the industry and its chambers.

On an average, the industry gets loan from banks at not less than 13.5-15 per cent.  Personal loans, barring housing loans are also available not less than this rate.   

Analysts feel the RBI continues to remain over-cautious even though the approach is harming the overall industrial environment.

The benchmark interest rate, or Repo, remains at 7.25 per and what is worse is that the central bank has not even given any hope of a rate cut.   

“The Reserve Bank’s monetary policy stance will be determined by how growth and inflation trajectories and the balance of payments situation evolve in the months ahead.  It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth,” RBI Governor D Subbarao said today in his policy speech.   

India’s GDP growth in Q4 of 2012-13 was 4.8 per cent, a marginal improvement over the previous quarter.  During the current financial year, the growth of industrial production decelerated to 2.3 per cent in April after picking up in the preceding month.   (KNN)