ASSOCHAM president expects RBI to cut interest rate by 25 bps
"The rate cut relief by RBI is not passed on to consumers by either private or public sector banks. This is the biggest problem or the challenge that needs to be addressed," Goenka said.
New Delhi: Amid a slowing economy and low economic sentiments, Reserve Bank of India's scheduled meeting on Thursday (December 5) is expected to reduce the lending rate. On the RBI monetary policy announcement, Bal Krishan Goenka, President of ASSOCHAM, made several observations.
The ASSOCHAM president told Zee Media that RBI will most probably go ahead with a rate cut in its monetary policy announcement on December 5, adding "Hopefully, the RBI will cut the interest rate by 25 bps, and this will be an important step to improve the current economic sentiment."
"The rate cut relief by RBI is not passed on to consumers by either private or public sector banks. This is the biggest problem or the challenge that needs to be addressed," he said.
Goenka said that if the banks further pass on the benefits of rate cuts, it will certainly benefit small or medium enterprises which will help in bringing the whole economy back on track.
Even if the GDP numbers have come down, the situation will improve and in the next 2-3 quarters, the economy will once again jump to 6-7% growth rate, he said, adding "We will move towards growth and economic stability in the next 2-3 months."
If state governments start reviewing old decisions, then it will not only spoil global sentiment but will also hamper foreign investment scenario, he said, adding that investors also lose their faith and most importantly, the state suffers the most, not the Centre.