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RBI Deputy Governor hints at rate cuts

| | Dec 10, 2014, at 10:34 pm
Kolkata, Dec 10 (IBNS): With the oil prices coming down and food prices under control, Reserve Bank of India (RBI) deputy governor S S Mundra hinted the possibility of interest rates cut in the near future.

“Oil prices are low, commodity prices are also low and food prices have also softened. If all of these remain same, there will be room for softening of policy stance,”   Mundra said during an Interactive Session organized by CII Eastern Region here Wednesday. According to him, India has to grow despite global uncertainties.

Mundra said there is a demand from the industry for refinance of existing projects, adding that RBI will come out with the guidelines soon. New projects will get the scope for refinance every five years till the economic life of the projects as already declared, he said.

According to him, a fresh set of guidelines on "5/25 rule" for restructuring of loans to existing projects classified as standard assets will soon be issued by Reserve Bank. The new guidelines will be in place over the next few days, he said. The 5/25 rule currently applies only to new infrastructure projects.

Mundra also said the central bank would grant licences to “payment banks” by March or April after releasing the final guidelines for applications last month.

He also said banks may demand higher equity from companies that are highly leveraged before offering fresh loans to such firms.

The RBI has given an opportunity to MFIs to apply for small bank licences, a move which was welcomed by MFI representatives present at the session.

Earlier, in his welcome address,  Viresh Oberoi, Chairman, CII Eastern Region & Managing Director, mjunction services ltd, said the RBI has pegged Indian economy to grow 5.5 per cent in the current fiscal (2014-15) and accelerate to 6.3 per cent in 2015-16. “This is quite encouraging because in the last two financial years, India’s growth tottered below 5 per cent” he said.

The IMF and the World Bank have also projected 5.6 per cent growth for India this year, citing renewed confidence in the market on the back of a series of economic reforms being pursued by the new government at the Centre, he said.

“However, there are a few internal risk factors to the aforementioned projections, NPA issues in the banking sector and jobless growth being the two major ones,”  Oberoi said.

C S Ghosh, Member, CII Eastern Regional Council & Chairman & Managing Director Bandhan Financial Services, delivered the concluding remarks.


Caption:
DSC-7245: (L-R) Mr S S Mundra, Deputy Governor, Reserve Bank of India; Dr Saugat Mukherjee, Regional Director, CII Eastern Region, Mr Viresh Oberoi, Chairman, CII Eastern Region & Managing Director, mjunction services ltd; and Mr C S Ghosh, Member, CII Eastern Regional Council & Chairman & Managing Director Bandhan Financial Services, during an Interactive Session in Kolkata on 10 December 2014

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