Raj Nair- President, IMC Chamber of Commerce and Industry and Chairman, Avalon Consulting
April 4, 2019
IMC Chamber of Commerce and Industry thanks the RBI for heeding our call for 25 bps repo rate cut and for its timing which was essential and opportune. Kudos for Part B on the dev and regulatory policy which augurs well for Banks, good NBFCs and small agri loans.
The timing was opportune because of three reasons:
The timing was essential also for three reasons:
In this context, Part B of the Governor’s policy announcement is very important. It provides for averting a borrowing crisis for MSME by Q2 of FY 20 when NBFC’s lending ability was expected to drop sharply and lending rates were expected to rise. As per the new policy, there will be harmonisation of different categories of NBFCs and also a rearrangement of risk weightages to enable better-performing NBFCs to be able to access more banking funds and at a lower rate. Banks themselves will get flexibility in raising bulk deposits because of the change in definition. Similarly, by raising the limit of collateral-free loans to farmers from Rs 1 lakh to Rs 1.60 lakhs it will help small farmers access formal lending sources in stead of going to loan sharks.