August 7, 2019
Cut in repo rate to rejuvenate consumption, transmission by banks crucial for fruitful outcomes: PHD Chamber
While welcoming the 35 basis points cut in repo rate from 5.75% to 5.40% by RBI Mr. Rajeev Talwar, President, PHD Chamber of Commerce and Industry said in a press statement issued here today that it would help to rejuvenate consumption and increase competitiveness of the producers with reduced cost of capital.
However, at this juncture, transmission of the cut in repo rate with an effective reduction in lending rates by the banking sector would be crucial to materialise the benefits at the ground level, said Mr. Rajeev Talwar.
Calibrated steps undertaken by RBI such as enhanced credit flow to the NBFCs including harmonisation of single counterparty exposure limit for banks’ and permitting banks to on-lend through NBFCs for credit to the priority sector are highly appreciable, said Mr. Talwar.
These measures would go a long way to address the financial challenges of the NBFCs and priority sector, he said.
Going ahead, we expect repo rate to come down to 5% in the coming quarters for enhanced liquidity and availability of credit to the industry especially to the MSMEs with a significant reduction in the cost of capital, said Mr. Rajeev Talwar.
Koteshwar Prasad Dobhal