RBI’s announcements are aimed to save our economy – ICCIC

The Indian Chamber of Commerce and Industry, Coimbatore on behalf of trade, industry of this region welcomed the announcements of RBI made on Friday.

The Chamber thanked the RBI Governor for making these administrative measures which could create conditions for a revival of India’s economic activity. ICCIC welcomed the decision of increasing the export credit period from one year to 15 months.

A press release from the Chamber mentioned that V.Lakshminarayanasamy, President of ICCIC had said “The extension of the moratorium is a welcome step which will bring in some relief to the borrowers, but it can put pressure on the banks. RBI has taken a calibrated approach to save the economy rather than favoring banks.It would provide solace to the ailing economy. It will also bring some relief for Corporate borrowers.

Borrowing costs is likely to come down with Reserve Bank of India resuming the process monetary easing by lowering the repo rate 40 bps in line with market expectation and ensuring easy liquidity for banks.

By cutting the Repo Rate and Reserve Repo Rate, RBI aims to inject more liquidity and what is needed is to remove the risk averseness as there is substantial liquidity in the banking sector.

As rightly said by the Governor of RBI the down side risks to this assessment on fiscal and administrative measures are significant and contingent upon the containment of the pandemic and quick phasing out of social distancing and lockdown.”