RBI's 'activism' missing in its policy review: Industry

Having expected cut in the policy rates, industry today felt let down by the Reserve Bank which announced no step to bring down the interest costs even when low inflation offered an opportunity for an aggressive approach to stem economic downturn.

Having expected cut in the policy rates, industry on Tuesday felt let down by the Reserve Bank which announced no step to bring down the interest costs even when low inflation offered an opportunity for an aggressive approach to stem economic downturn.

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The apex business chambers said the RBI had a great opportunity to take steps for a lower interest regime, in the face of its own assessment of inflation going down by three per cent by March.

"We are disappointed that the central bank in its credit policy announcement has held back its activism in further pruning the repo and reveres repo rates at a time when, by its own admission, inflation was expected to moderate to three per cent by March," Ficci said.

Though the chambers welcomed the step taken by the apex bank to extend special refinance facilities to banks up to September 30 for providing liquidity support to meet the funding requirements of mutual funds, non-banking finance companies and housing finance companies by relaxing the maintenance of SLR up to 1.5 per cent.

The chamber asked the RBI to give a further signal to the banks, who still are risk averse.