Assocham recommends cut in Bank Rate

Mumbai: Reduction in the Bank Rate by 1 per cent, proper surveillance by the Reserve Bank of India (RBI) to ensure the statutory liquidity ratio (SLR) at 25 per cent and moral suasion by the central bank on commercial banks to adopt the soft interest rate policy are some of the recommendations made by Assocham for the ensuing monetary and credit policy.

In a note submitted to the RBI, chamber president K K Nohria called for renewed efforts from the RBI to promote a term-money market that will act as a benchmark for various derivative products. Assocham held that the domestic money market has essentially remained an overnight call-money market.

The RBI needs to take steps to promote the corporate repo market segment. Corporates with excess short-term surpluses should be given an opportunity for short-term investments with reverse repo facility, the chamber said.