elines for international travellers
+Corporate news
+The latest
EXCISE : Tariff 41, 42
+ NT 27 + Circular 654
CUSTOM : Tariff 83, 84
+ NT 52
+ Cir 50, 51, 52
DGFT : Notification 13
+ Cir 11 + PN 30, 31
SERVICE TAX:
New Notifications +
SC landmark rulings
Directory
Customs News
Editor's Mail Box
+old stories
+WTO news
+Banking
+Fashion
+Legal news
+Infotech
+I-T news
+Editor's Voice
Courier corner
Cenvat tips
+Liquor News
+ Airport News
+Export News
+PAN Corner
+RLT Corner
+Service news
+Narco news
+Credit Policy (2003-04)

ASSOCHAM WAS EXPECTING 50 BASIS POINT CUT IN RRR, RR

Thesynergyonline Economic Bureau

NEW DELHI, APRIL 22 :
WELCOMING the RBI Annual Credit policy, ASSOCHAM president, Mr. Sajjan Jindal has expressed hope that corporate sector and retail consumers may get to borrow at reduced interest rates which could push the demand level in slowing Indian economy.

Mr. Jindal, however, added the corporate sector was expecting 50 basis points cut in RR and RRR especially when the ASSOCHAM has been pressing for it for too long.

The Chamber Chief further stated that the central bank has given clear indications to the commercial banks to lower their lending rates in view of declining credit growth and the severe impact of the global crisis on Indian business environment.

Mr. Jindal said the interest rates should be brought down to a single digit level observing that easy availability of credit to the productive sectors, specifically the employment-oriented industries such as textiles, gems & jewellery, construction is mandatory to bring back economic buoyancy.

ASSOCHAM Chief welcomed the RBI decision for launching Exchange Traded Rate futures contact soon and appreciated extension of special refinance facility to banks till March 2010. The Chamber also welcomed constitution of Working Group to suggests changes in Benchmark Prime Lending Rate System (BPLR).

Mr. A. Balasubramaniam, CIO, BSLMF :

The RBI Policy measure continues to advocate low interest rate policy through cut in repo rate by 25 bps. This would lead to further drop in lending rate, thus increasing pressure for lending. Government borrowing programme, could sail through smoothly due to the rate cut as well as high liquidity .

Madan Menon, Interim Country Executive, ABN Amro Bank, India :

“A 25 bps cut in the policy rates is broadly along anticipated trends. We expect that the RBI could now move gradually on the policy rates front, given that liquidity in the banking system is comfortable, overall monetary conditions in the economy are significantly easy and bank lending rates have trended lower. This rate cut would induce some more downward adjustment in banks’ cost of funds and lending rates. The RBI has also indicated that GDP growth would moderate further this year to 6%. While that is a reasonable target, we may fall short on account of the recessionary global economic environment. The developments surrounding STRIPS and Interest Rate Futures, are welcome.”

Ms. Yashika Singh, Head
Economic Analysis, Dun & Bradstreet India :

THE RBI, in its annual policy statement for FY10, reduced the repo and reverse repo rates by 25 bps each to 4.75% and 3.25% respectively. Credit growth by banks has witnessed substantial moderation as per the latest available estimates. Moreover, despite a 300 bps reduction in repo rate by the RBI till date, the reduction in BPLRs has been in the range of 50-150 bps only. This implies that the monetary transmission mechanism has been weak and therefore, these rate cuts translating into demand stimulation remains a concern. Real GDP growth for FY10 is projected at 6 per cent (as compared with 6.5-6.7 per cent growth projected for FY09). The significant moderation in growth estimates places an urgent need to boost the flow of credit to all productive sectors of the economy, particularly to MSMEs, to aid the process of economic recovery. The 25 bps cut in repo is therefore yet another move by the RBI to encourage lending. The 25 bps cut in reverse repo rate is aimed at discouraging banks from parking an increasing amount of funds in the reverse repo window and thus increasing the availability of funds for
commercial lending. However, while these rate cuts could result in lowering of short- term rates, the long end of the yield curve continues to remain at elevated levels owing to the Government’s huge borrowing programme.

Members' Zone

+The insider
+Books Counter
+Exim Policy 2002--07
+Import performance of
items on which QRs were
removed w.e f March 31, 2000
+ DEPB Rates
+ Special Offer
+Advertise with us
+FEMA
+Query service
+Job Opportunities
+drawback rules+rates
+sales & purchase
+I-T news
+customs news
+provident fund
+service tax
+Credit policy
+workshops and
conferences
+Agriculture
+CHAs' News
+Baggage norms
+Fashion
+Hotel
+General
+Politics
+Excise/Customs
+Entertainment
+Management
+Exim Policy 2002--07
+Import performance of
items on which QRs were
removed w.e f March 31, 2000
+ DEPB Rates
+ Special Offer
+Advertise with us
+FEMA
+Query service
+Job Opportunities
+drawback rules+rates
+sales & purchase
+I-T news
+customs news
+provident fund
+service tax