Over-cautious RBI approach to hurt economic growth, says
ASSOCHAM
05/08/2014 15:57
The retention of benchmark lending rate, Repo, at eight per cent, is a clear indication of the Reserve Bank's pronounced bias in favour of further cutting inflation, which may not help revive growth to the extent of its potential of six per cent in the current fiscal, said ASSOCHAM President, Rana Kapoor. "The reduction in SLR by 50 basis points is more symbolic in nature at this point of time. As Governor Raghuram Rajan himself has stated that banks at present have parked funds in these SLR compliant bonds at levels higher than their obligation," said the ASSOCHAM Chief. "That clearly shows they are risk averse for one, and second there is not much demand for credit in the wake of tentative growth signals and high cost of borrowing," said Kapoor. "RBI has once again taken an over-cautious approach and easing of the same could have taken the GDP growth in the near about of six per cent in the current fiscal itself." Howerver, ASSOCHAM welcomed the comments by Rajan that the unsavory Syndicate Bank episode should not become a reason for witch hunting in the public sector banks by the investigative agencies
05/08/2014 15:57
The retention of benchmark lending rate, Repo, at eight per cent, is a clear indication of the Reserve Bank's pronounced bias in favour of further cutting inflation, which may not help revive growth to the extent of its potential of six per cent in the current fiscal, said ASSOCHAM President, Rana Kapoor. "The reduction in SLR by 50 basis points is more symbolic in nature at this point of time. As Governor Raghuram Rajan himself has stated that banks at present have parked funds in these SLR compliant bonds at levels higher than their obligation," said the ASSOCHAM Chief. "That clearly shows they are risk averse for one, and second there is not much demand for credit in the wake of tentative growth signals and high cost of borrowing," said Kapoor. "RBI has once again taken an over-cautious approach and easing of the same could have taken the GDP growth in the near about of six per cent in the current fiscal itself." Howerver, ASSOCHAM welcomed the comments by Rajan that the unsavory Syndicate Bank episode should not become a reason for witch hunting in the public sector banks by the investigative agencies
