Though, repo rate cut was expected from RBI
18, 50 basis points cut in Statutory Liquidity Ratio (SLR) is welcome and is
expected to enhance banking sector liquidity in the coming times, said Mr.
Gopal Jiwarajka, President, PHD Chamber of Commerce and Industry.
Statutory Liquidity Ratio (SLR) has been
reduced by 50 basis points from 20% to 19.50% of banks’ net demand and time
liabilities (NDTL) from the fortnight commencing October 14, 2017.
Monetary Policy Committee (MPC), RBI has kept
the policy repo rate under the liquidity adjustment facility (LAF) unchanged at
6%. Consequently, the reverse repo rate under the LAF remains at 5.75%, and the
marginal standing facility (MSF) rate and the Bank Rate stands at 6.25%.
However, downward projection of real GVA
growth to 6.7% for 2017-18 is a matter of concern, he added.
At this juncture, softening of monetary
policy stance is one of the critical steps to re-capture industrial activity
which is impacted by multiple factors and high borrowing cost is one of them,
added Mr. Jiwarajka.
Industry is facing a tough environment as
demand is decelerating and costs of doing businesses are still high, he added.
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