RBI move not to cut rate of borrowing
Updated: Mar 19, 2013 04:36:30pm
New Delhi, Mar 19 (KNN) The industry, including the micro and small enterprises, today said the RBI decision to cut interest rates moderately will not translate into reduction in the cost of borrowing.
“The whole country was demanding a rate cut…. Let’s hope that this will help the industry in India,” said Federation of Indian Micro, Small and Medium Enterprises President, VK Agarwal.
Meanwhile Assocham said it is unlikely that banks will slash down the lending rates in a hurry which will help the industry.
The key is for lending rates to come down, but this will happen only when banks are comfortable with deposits and deposit rates come down, country head of HSBC India and Federation of Indian Chambers of Commerce and Industry, President, Naina Lal Kidwai, said in a statement.
"Bank deposits grew at around 12.5 per cent while credit growth was 15-17 per cent with credit deposit ratios at a high of 78, leading me to believe that banks will not cut interest rates in a hurry," she added.
This is the second policy rate cut by the RBI since January 29
Investor sentiments have been dampened with the guidance that the headroom for further monetary policy easing remains quite limited according to Associated Chambers of Commerce and Industry (Assocham)
"In a way, what RBI is telling us is that we must learn to live with high interest rates scenario even as Governor D. Subbarao himself has expressed concern over slowdown in the economy," said Assocham president Rajkumar N. Dhoot.
RBI today cut the policy interest rates by 0.25 percentage points in line with market expectations. However, it did not make any changes in cash reserve ratio. (KNN)
“The whole country was demanding a rate cut…. Let’s hope that this will help the industry in India,” said Federation of Indian Micro, Small and Medium Enterprises President, VK Agarwal.
Meanwhile Assocham said it is unlikely that banks will slash down the lending rates in a hurry which will help the industry.
The key is for lending rates to come down, but this will happen only when banks are comfortable with deposits and deposit rates come down, country head of HSBC India and Federation of Indian Chambers of Commerce and Industry, President, Naina Lal Kidwai, said in a statement.
"Bank deposits grew at around 12.5 per cent while credit growth was 15-17 per cent with credit deposit ratios at a high of 78, leading me to believe that banks will not cut interest rates in a hurry," she added.
This is the second policy rate cut by the RBI since January 29
Investor sentiments have been dampened with the guidance that the headroom for further monetary policy easing remains quite limited according to Associated Chambers of Commerce and Industry (Assocham)
"In a way, what RBI is telling us is that we must learn to live with high interest rates scenario even as Governor D. Subbarao himself has expressed concern over slowdown in the economy," said Assocham president Rajkumar N. Dhoot.
RBI today cut the policy interest rates by 0.25 percentage points in line with market expectations. However, it did not make any changes in cash reserve ratio. (KNN)
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