UK investors call for interest rate cut in India

The UK-based investors have asked the Indian government to cut real interest rates to help boost investments, underlining that rates are way too high and need to be brought down significantly.

PTI| Updated: Jan 19, 2016, 20:56 PM IST
UK investors call for interest rate cut in India

London: The UK-based investors have asked the Indian government to cut real interest rates to help boost investments, underlining that rates are way too high and need to be brought down significantly.

Yes Bank managing director and CEO Rana Kapoor, who was present at the India Investor Summit held at the London Stock Exchange (LSE) with Finance Minister Arun Jaitley, said that clearing lingering tax issues was also highlighted during the meet.

"The finance minister spoke very eloquently. But the overwhelming view was that India's real rates of interest need to come down. The international investor community conveyed this point very strongly to the Indian Finance Minister. The rates are way too high and need to be brought down significantly and that is a view I share with them," Kapoor told PTI after the summit.

"The other points raised were that all the overhang of taxes need to be sorted out once and for all. The renewable energy sector as a sunrise sector in the Indian economy was also discussed widely," he said.

Asked about the general mood among UK-based investors, he added: "The UK investors are still very tentative...until the economy starts picking up, they will remain a little tentative. But overall the FDI (foreign direct investment) investors are far more supportive of investing in India."

Kapoor rang the opening bell at the LSE today to formalise Yes Bank's agreement with the exchange on "Green Bonds".

During Prime Minister Narendra Modi's visit to the UK last November, a Memorandum of Understanding was signed between the bank and the LSE to develop collaboration around bond and equity issuance, with a particular focus on Green Infrastructure Finance.

"This is a very unique accomplishment for our bank because we are one of the first to launch these bonds in the world. We want to grow this considerably.

As the Prime Minister articulated at Wembley during his UK visit, Green Bonds are the future. For the next one and a half years, we want to launch at least one billion dollars of Green Bonds," Kapoor said.

As part of the agreement, Yes Bank has confirmed the listing of a Green Bond of up to USD 500 million on the LSE by December 2016 and to raise further capital in London, potentially through the listing of Global Depository Receipts (GDR) as part of a one billion dollar equity capital raising plan.