India Inc has said that with the banks slashing benchmark lending rate, the move will act as a booster dose for the economy and propel consumption as lending may pick up significantly.
Commenting on the issue, CII Director General Chandrajit Banerjee told the media, "As loans become cheaper, sectors such as consumer durables, automobiles and housing should see a recovery. Various measures have been taken to encourage lending to the SME sector. We expect start-ups and SMEs to play a major role in the next growth cycle."
"Bank lending is likely to pick up significantly, as deposit mobilisation has been strong following demonetisation," he added.
As per reports, Prime Minister Narendra Modi in his address to the nation on Saturday had appealed to the banks flush with currency to move beyond their traditional priorities, and keep the poor, the lower middle class, and the middle class at the focus of their activities.