E-Paper
Coronavirus lockdown: Punjab dyers’ body complains to PM office about high interest rates
On March 27, RBI had reduced the repo rate from 5.15% to 4.4% to combat hardships faced by the industrialists due to the Covid-19 outbreak, but banks had not passed on the benefit to industrialists, the body says
With certain banks not reducing the interest rate on loans even when the Reserve Bank of India (RBI) has decreased the repo rate (RR), the dyeing industry in Ludhiana has filed a complaint with the Prime Minister’s office (PMO) demanding its intervention to pass on the benefit to the industry amid the coronavirus lockdown.
Repo rate refers to the rate at which commercial banks borrow money by selling their securities to the RBI to maintain liquidity, in case of shortage of funds or due to statutory measures. It helps RBI keep inflation under control.
The Dyers Association complained that on March 27, RBI had reduced the RR from 5.15% to 4.4% to reduce industrialists’ hardships. “The benefits are to be passed on to the industry and residents, but the purpose is being defeated as the banks are still charging interest on the previous rates. Bank officials claim they have received nothing in writing from RBI to reduce the interest rates on loans,” said Bobby Jindal, general secretary, Punjab Dyers’ Association.
President of United Cycle and Parts Manufacturers Association (UCPMA), DS Chawla, said, “The industry is facing a tough time during the lockdown and the government is aware of it. RBI should take immediate steps to bring some relief to the industry by stepping in, pass on the benefit to the industry and later, a declaration should be taken from the banks, stating that the benefit has been passed on.”
‘POST LOCKDOWN, DEFER EMIs FOR 6 MONTHS WITH INTEREST WAIVER’
Chawla also said the RBI hac deferred the EMIs for three months -- April, May and June, but it, along with the Union government, had failed to waive the interest. “Further, the government should also defer the EMIs for at least six months post the lockdown, as the industry needs time to revive. No interest should be charged for this period because if interest is not waived, there will be no benefit to the industry,” he said.
