CRR hike would put upward pressure on interest rates: PHDCCI
Industry body PHD Chamber on Friday said the CRR hike by 0.5 per cent would put upward pressure on interest rates.
By PTI |
NEW DELHI: Industry body PHD Chamber on Friday said the CRR hike by 0.5 per cent would put upward pressure on interest rates.
The body said the move could have been avoided by managing the supply side rather than taking monetary measures.
The chamber also raised concern for a possible hike in housing and other loan rates, which are likely to follow the central bank's move.
"The hike will further harden the interest rate structure in the country as banks may increase benchmark prime lending rates, personal loan and home loan rates in the near future," PHD Chamber President L K Malhotra said in a release.
The Reserve Bank yesterday raised the Cash Reserve Ratio (CRR) - the proportion of depositors' money that banks have to park with the banking regulator - by half a per cent to eight per cent.
The move, which came ahead of RBI's annual credit policy that is to be announced on April 29, would take out Rs 18,500 crore from the banking system.
Higher interest rate regime sets in motion rising cost, chokes investments and exerts a downward pressure on industrial production, the chamber added.
The body said the move could have been avoided by managing the supply side rather than taking monetary measures.
The chamber also raised concern for a possible hike in housing and other loan rates, which are likely to follow the central bank's move.
"The hike will further harden the interest rate structure in the country as banks may increase benchmark prime lending rates, personal loan and home loan rates in the near future," PHD Chamber President L K Malhotra said in a release.
The Reserve Bank yesterday raised the Cash Reserve Ratio (CRR) - the proportion of depositors' money that banks have to park with the banking regulator - by half a per cent to eight per cent.
The move, which came ahead of RBI's annual credit policy that is to be announced on April 29, would take out Rs 18,500 crore from the banking system.
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Higher interest rate regime sets in motion rising cost, chokes investments and exerts a downward pressure on industrial production, the chamber added.
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