Accommodative Stance Of RBI Is Encouraging: FICCI President

Commenting on the monetary policy Mr Uday Shankar, President, FICCI said, "The Central Bank's indication yet again to continue with the accommodative stance, until necessary, to revive growth is encouraging. This is especially comforting when there was an expectation about the normalization of the monetary policy. The Central Bank has thoughtfully navigated the monetary policy through the pandemic. We are confident that the same thoughtfulness will continue in the future especially in view of an anticipated third wave and the continuing softness in the economy."

"On the economic front despite the uptick, FICCI believes that it is important that a stimulus is provided by the government to give a thrust to consumption. The timing of such measures will be apt at this juncture as the festive season is about to begin," added Mr Shankar.

FICCI also welcomes the announcement on the extension of the on tap TLTRO Scheme until December 31, 2021, and the extension of the period of relaxation for banks to avail funds under the marginal standing facility by dipping into the Statutory Liquidity Ratio. However, the outreach of the TLTRO scheme has been very limited especially in case of NBFCs.

"Also, the extension of deadline by six months to the meet the financial parameter requirements under the Resolution Framework 1.0 announced last year comes as a respite. However, given the way the COVID situation has evolved, some of the deeply stressed sectors may need a longer time period to be able to meet the financial parameters. We also feel that for such sectors the extant provisions of the RBI circular should be extended for one more year with invocation for such Resolution being allowed no later than 31st Dec 2021, and resolution plan implementation to be completed by 30th June 2022," said Mr Shankar.

"In addition, announcements pertaining to export credit in foreign currency and restructuring of derivative contracts amid the circumstance of transition away from the London Interbank Offered Rate are welcome. This is a landmark change that will have an impact on businesses throughout the world. We will look forward to further guidance on this from the Central Bank", added Mr Shankar.

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