New Delhi, Oct 22: Confederation of Indian industry has urged the RBI to cut cash reserve ratio by one percentage point and bank rate by 0.5 a per cent in the busy season credit policy to boost economic recovery."The reduction in interest rates will not only give a further push to the cyclical recovery that has emerged in the current fiscal, but will also improve sentiments in the asset market reinforcing the cyclical stimulus to growth," CII said in a 15-point agenda for the forthcoming credit policy.
It also asked the government to push through the fiscal reforms agenda including introduction of universal banking and reduction in non-performing assets of banks.
The chamber said a 1 per cent reduction in CRR, which would release about Rs 7,000 crore into the system, and a 0.5 per cent cut in benchmark bank rate to 8.5 per cent would bring down the prime lending rates.
The debt market reforms should be pushed through faster and the government should facilitate electronic transfer and real time settlement of government securities by replacing public debt act by government securities act, Confederation of Indian Industry said.
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