CII thumbs up for Governor Reddy

Confederation of Indian Industry (CII) on Monday welcomed the new RBI Governor's maiden Credit Policy stating it as a carefully drafted Credit Policy, which focuses on the need for continuity, and has been designed to take into account the excellent performance of the economy.

CII president Anand Mahindra commenting on the Credit Policy in Bangalore on Monday said: "In today's changing times, it is somewhat anchronistic to expect all changes in monetary, credit, interest and exchange rate policy to be announced either in November or in April.The economy and the financial sector are continuously changing and the RBI can always introduce appropriate changes at any point in time, instead of waiting for the beginning of the so-called busy season and the slack season."

Given the already soft interest rate regime and the recent 50 basis point cut in repo rate, "CII understands why RBI has kept the Bank rates unchanged at 6 per cent. Similarly, given the excess liquidity in the financial system, there may have been no urgency to immediately reduce the Cash Reserve Ratio."

Summing up, he said: "We at CII see this Credit Policy as one that emphasises continuity. There are no negatives, ome notable positives and a distinct bias in favour of facilitating higher economic growth."