labels: confederation of indian industry
CII for 50 bpt reduction in bank rate news
Our Banking Bureau
26 April 2002
New Delhi: The Confederation of Indian Industry (CII) has suggested a 50-basis point (bpt) reduction in bank rate, which would signal a further reduction in bank lending rates. There is also a need to extend increased freedom to banks to set the savings deposits rates, subject to ceiling prescribed by the Reserve Bank of India, the chamber said in a statement here.

In its suggestions for the Slack Season Credit Policy 2002-03, CII said the policy should focus on two principle objectives - first should be to effect liquidity in the short term via the traditional tools of the monetary policy and the second should be to usher in deeper structural reforms in the financial system.

Besides seeking reduction in bank rate, CII further suggested a slew of measures to increase liquidity and reduce volatility in the markets, including formulation of a roadmap to reduce the requirement of maintenance of CRR from the current level of 5.5 per cent of net demand and time liabilities (NDTL) to 3 per cent of NDTL.

CII said the credit policy should bring about a reduction of SLR from the current level of 25 per cent of NDTL to 15 per cent of NDTL.

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CII for 50 bpt reduction in bank rate