RBI Governor Dr. D.Subba Rao released the Third-Quarter Monetary Policy 2012-2013 announcing the RBI decision to reduce the Repo Rate (Short-term lending to banks) by 25 basis points from 8.00% to 7.75% and also Cash Reserve Ratio (CRR) by 25 basis points from 4.25% to 4.00%.
While welcoming the RBI’s decision to reduce the Repo Rate for and Cash Reserve Ratio by 25 basis points, Dr. A.Sakthivel, President said that the industry was actually expecting a reduction of 50 basis points as the interest rate cut would largely help Tirupur knitwear exporting units, which are currently under financial pressure due to various issues.
Dr. Sakthivel noted that it is the required time for the banks to extend help to the ailing units and expect that all banks would come forward to reduce their Base Rates without delay to support the survival and growth of industry.
Dr.A.Sakthivel said as CRR has been reduced, the fund liquidity is available with banks and they could lend to the needed units.