While welcoming the 35 basis points cut in repo rate from 5.75% to 5.40% by RBI Rajeev Talwar, President, PHD Chamber of Commerce and Industry said in a press statement issued that it would help to rejuvenate consumption and increase competitiveness of the producers with reduced cost of capital. However, transmission of the cut in repo rate with an effective reduction in lending rates by the banking sector would be crucial to materialise the benefits at the ground level, said Talwar.
Calibrated steps undertaken by RBI such as enhanced credit flow to the NBFCs including harmonisation of single counterparty exposure limit for banks' and permitting banks to on-lend through NBFCs for credit to the priority sector are highly appreciable. These measures would go a long way to address the financial challenges of the NBFCs and priority sector, he added.
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