RBI’s lower interest rates need to be transmitted to end customers, says EEPC India Chairman

Economy


While Reserve Bank of India‘s lower interest rate regime is intended at supporting growth, steps need to be taken for full transmission of the rates to the exporters and end-customers at large. Export finance continues to be high in the country when compared with other similar markets, said EEPC India chairman Mr Mahesh Desai.

Commenting on monetary policy statement, Mr Desai said that RBI must advise all the banks to pass on full benefits of low interest rate to borrowers especially SMEs.

He said that the central bank has kept the key interest rate unchanged at 4% on expected lines. Further, it has retained the accommodative stance given that the second wave of pandemic poses threat to growth.

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RBI has maintained the GDP growth forecast at 10.5% for the current fiscal.

The EEPC chairman said that some of the macro indicators such as GST collection and merchandise export figures in the last few months have shown economic growth gathering pace from historic low last year.

“But given the surge in coronavirus cases and restrictions imposed by various states to contain the pandemic, there are downside risks,” he added.

Moreover, there have been periodic lockdowns in other countries which could slow down the ongoing recovery in international trade, said Mr Desai.



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