New Delhi: ASSOCHAM today described the decision by the RBI to cut the cash reserve ratio by 50 basis points, releasing Rs 1.16 lakh crore into the banking system as a pragmatic measure to maintain the inflation-growth balance in the face of evolving macro-economic situation.
The chamber also welcomed the measures to boost India’s foreign exchange inflows by revision in the FCNR(B) rates, thereby providing stability in the forex market.
“The decision by the RBI Monetary Policy Committee to keep the policy rate unchanged at 6.50 per cent while slashing the CRR by 50 basis points has to be seen as a holistic approach towards keeping a good balance between keeping inflation under check for a sustainable economic growth, ” ASSOCHAM President Mr Sanjay Nayar said.
The Chamber Secretary General Mr. Deepak Sood said, ” releasing Rs 1.16 lakh crore through CRR cut should be a major relief for the banks and the industry as the incipient signs of liquidity tightening were seen”.
The ASSOCHAM said while the downward GDP growth projections at 6.6 per cent for the current fiscal were realistic, the growth trajectory would normalise above 7 per cent from the fourth quarter of 2024-25 into the next financial year. ” We would agree with RBI Governor Mr Shaktikanta Das ‘ assessment that the slowdown in economic activity has bottomed out ”.
As for inflation, as the RBI Governor has said, the situation should ease in the next couple of quarters because of good prospects of winter Rabi crop and normalisation in prices of food and vegetable prices from January onward.
ASSOCHAM complimented the Reserve Bank of India for ensuring stability in India’s foreign exchange market even in the face of a challenging global economic and geo-political environment. The decision to raise FCNR(B) deposit rates to attract capital inflows should provide stability in the forex market. ”It shows a nimble approach of the RBI to respond to the evolving market conditions”
The chamber lauded measures announced to ease the KYC norms in banks , especially for the vulnerable sections of the society. RBI has been in the forefront of several innovative technological initiatives in areas like AI and electronic payments, ASSOCHAM said.
