Chamber wants 1% cut in rates

new delhi: if the industry has its way, the slack season credit policy to be announced by the reserve bank of india on april 29 will see further softening of the interest rate in the country. in its submissions, while assocham has demanded 1 per cent reduction in the cash reserve ratio(crr and discouraging of banks from excessive exposure in government securities by prescribing higher risk weightage for the statutory liquidity ratio (slr), phdcci has demanded 1 per cent reduction in bank rate, 2 per cent reduction in crr and 1 per cent reduction in slr. on the plr front both the chambers has requested rbi to encourage banks to follow soft interest policy. while assocham has called for moralsuation on part of rbi, phdcci has said that no bank should be allowed to fix its plr exceeding a ceiling prescribed by rbi. as regards spread rates, phdcci wants to be maximum of plr+2 per cent for any category of borrower. criticising the monthly compounding of interest rates from april this year, assocham has said that it would raise the effective rate of interest by 0.5 to 0.75 per cent and go counter against the soft interest rate policy. on the money market, assocham has said that corporates excess short term surpluses should be given opportunity for short term investments with reverse repo facility. the chamber also wants rbi to remove the 7 day cap for the acceptance of deposits by banks. the chamber has also requested the government to notify the exemption of stamp duty for secondary market transfer of corporate debt instruments to increase the share of debt in the overall debt market. for the capital adequacy purpose, assocham has advocated a weighted slab for corporate bonds based on the credit rating parameter. assocham has requested rbi to advise banks to step up to the level of credit to this sector.