Cost of borrowing is main issue than money availability: Assocham on RBI policy review

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The ASSOCHAM President Rana Kapoor said, "While SLR cut by 50 bps will make available a little more money for lending by banks, the issue facing the industry at this point of time is not so much of liquidity but the cost of borrowing. With robust foreign inflows, the system has ample liquidity".

Somehow, the chamber chief said, the country must move towards a regime of benign interest rates if we have to see consumer demand pick up and industrial growth revive. It is also time that we aggressively tamed the inflationary pressures through measures other than the monetary tools.

It is an issue of supply management and not so much of supply constraints in so far as the food prices are concerned. We hope that with prospects of improved governance with the new government in saddle, the food economy will be managed better giving more headroom to the RBI to move the interest rates lower, added Mr. Kapoor.

For India Inc, the ASSOCHAM president said, policy review does not really bring any cheers at this point of time and therefore only have to wait for some more time.

Story first published: Wednesday, June 4, 2014, 23:00 [IST]
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