Moderate further tightening: CII tells RBI

Posted By: Staff
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New Delhi, Apr 21: While expressing confidence in the potency of the Reserve Bank of India's (RBI) credit policy towards sucking out the liquidity, the Confederation of Indian Industry (CII) has opined that further measures to tighten the sytem should be moderated so that growth in not hampered.

The central bank on Tuesday, Apr 20 hiked the key rates by 25 basis points to reduce the liquidity from the banking system and to tame inflation pressures.

"Given that industrial growth and investments are picking up, the RBI will need to calibrate further tightening going forward. Such moderation will be required in order to support growth through the availability of funds at a reasonable rate," said Mr Venu Srinivasan, President, CII.

In a statement issued on Wednesday, Apr 20, the CII said that it understands the central bank's concern with Inflation.

CII is in agreement with the RBI's projection of for growth and inflation over the coming year, the CII president said, adding that stronger growth is possible if the financial and business environment remains conducive and firms are able to expand capacities at a rapid rate.

CII also appreciates some of the initiatives taken by the RBI to modify regulatory policies to make them more supportive of growth and inclusion especially the steps taken to boost lending to MSMEs and infrastructure and relax the guidelines for bank correspondents, the statement added.

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