October 4, 2019
Continuous cut in Repo rate to induce demand in the economy: PHD Chamber
The 25 basis points cut in the repo rate from 5.40% to 5.15% by RBI will help to induce demand and refuel economic growth in the coming quarters said Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
It will enhance competitiveness with reduced cost of capital for the producers, said Dr D K Aggarwal.
However, at this juncture, transmission of the cut in repo rate by the banking sector will be crucial to percolate the benefits at the ground level, said Dr D K Aggarwal.
We appreciate the announcement on increase of household income limit for borrowers of NBFCs- Micro Finance Institutions (MFIs) from Rs 1 lakh to Rs. 1.25 lakh for rural areas, Rs 1.60 lakh to Rs 2 lakh for urban/ semi-urban areas and lending limit from Rs 1 lakh to Rs 1.25 lakh per eligible borrower, said Dr D K Aggarwal.
This will enhance the role of MFIs in delivering credit to those in the bottom of economic pyramid and encourage their participation in the growth of economy, said Dr D K Aggarwal.
Going ahead, we expect continuous reduction in repo rate to the level of 4.5% in the coming quarters to support the liquidity in the economy and easier access of credit to the industry, especially MSMEs, said Dr D K Aggarwal.