BCC lauds RBI's midterm review annual monetory policy

Kolkata, Oct 30 (UNI) Reacting to RBI's mid-term Annual Monetary Policy for 2007-08, BCC president P R Agarwal has lauded apex bank Governor Y V Reddy's design to push forward reforms in the banking system.

Bharat Chamber of Commerce president in a statement said the latest step of RBI would enable the banking system to fulfil its basic role as the financial intermediary in the entire economy.

The various measures announced in the review were expected to catalyse growth propulsion, he added.

''In view of continuous rupee appreciation, the decision to allow importers and exporters having foreign current exposures to write covered call and put options, both foreign and cross-currency and receive prima is appreciable,'' Mr Agarwal said yesterday.

Mr Agarwala said the decision to increase CRR by 50 basis points to 7.5 per cent effective fortnight beginning November 10 would suck out liquidity from the banking system, which would hamper credit flow to the manufacturing sector.

He also said the effective measures have not been taken to increase the credit flow by cutting the key rates that would bring down the cost of funds.

''Containing inflation at around three per cent through effective measures is laudable,'' Mr Agarwal added.

UNI