Realty developers disappointed with RBI policy

Pan holding of rates

Real estate developers, who are battling low home sales and high cost of capital, say they are disappointed over holding of rates by the central bank.

In today's policy announcement, the Reserve Bank of India has cut cash reserve ratio by 25 basis points while keeping the key rates unchanged.

"The cut in CRR will release Rs 17,500 crore into the system. It will fuel inflationary tendencies in the system and not cutting of the rates. It will release more money into the system but better will be lowering of rates," said Rajeev Talwar, executive director, DLF Ltd.

"There is little disappointment. Let us hope for the best in the next policy," Talwar said.

Added Niranjan Hiranandani, managing director of Hiranandani Constructions and president, Indian Merchants Chamber :"Obviously inflation is a major concern of RBI. But keeping rates high does not seem to be working, given that the year-on-year WPI-based inflation rate for August 2012 was 7.5% and that for September 2012 it increased to 7.8 per cent. The RBI now needs to think in line with the Government of India’s policy and encourage investment on the supply side as a tool for containing inflation."