Assocham Praises RBI's Rs 1.16 Lakh Crore Liquidity Injection
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New Delhi, Dec 6 (NationPress) The prominent industry body Assocham expressed its approval on Friday regarding the Reserve Bank of India’s (RBI) choice to decrease the cash reserve ratio by 50 basis points, thereby injecting Rs 1.16 lakh crore into the banking sector. This decision is seen as a practical approach to uphold the equilibrium between inflation and economic growth amidst the changing macroeconomic environment.
The chamber also endorsed the initiatives aimed at enhancing India’s foreign exchange inflows through the revision of the FCNR(B) rates, which will help stabilize the foreign exchange market.
Assocham President Sanjay Nayar noted, "The RBI monetary policy committee's decision to maintain the policy rate at 6.50 percent while reducing the CRR by 50 basis points should be viewed as a comprehensive strategy for sustaining a healthy balance between controlling inflation and achieving sustainable economic growth."
Furthermore, Deepak Sood, Secretary General of Assocham, mentioned that the release of Rs 1.16 lakh crore via the CRR cut should provide significant relief to both banks and industries, especially as initial signs of liquidity tightening were observed.
Despite the downward projections for GDP growth at 6.6 percent for the current fiscal year, it is anticipated that growth rates will normalize above 7 percent starting from the fourth quarter of 2024-25 into the subsequent financial year.
Assocham concurs with RBI Governor Shaktikanta Das' assertion that the downturn in economic activity has reached its lowest point.
Regarding inflation, the RBI Governor has indicated that it is expected to moderate in the upcoming quarters due to favorable prospects for the winter Rabi crop and anticipated stabilization in food and vegetable prices from January onward.
CS Setty, Chairman of the State Bank of India (SBI), remarked that the monetary policy announcements are practical and transparent, marking significant progress in regulatory and developmental policy.
He added, "The establishment of a committee to examine the ethical use of AI in financial services and the utilization of technology to identify mule accounts is a timely initiative."
