We bring to you some prominent reactions to Reserve Bank’s announcement to cut interest rate by 40 basis points and other measures
Satish Magar, President, CREDAI NATIONAL : We expected more stringent measures from the RBI booster to revive the economy. Real Estate sector can act as a catalyst in resurrecting the economy, backed by stringent fiscal and non-fiscal measures. The move of moratorium extension is a short term piecemeal solution to a long term problem. The interest rate should be reduced with firm liquidity measures as this is the need of the hour backed by one -time restructuring of loans to help the real estate sector from crumpling. RBI has tried to ease the pressure on borrowers and has extended group exposure limit for lenders to corporates from 25% to 30 % but this is not enough to solve the ongoing liquidity crisis. The government now needs to ensure that banks are forthcoming and are passing on the benefits to us currently, there is a dearth of income in the sector owing to the COVID crisis. The real estate industry remains the second-largest employer after agriculture and prolonged slowdown in the sector will have a direct impact on the survival of 269 allied industries hence, it is critical for the Government and RBI to take immediate measures to provide economic relief.
Rohit Gera, Managing Director, Gera Developments Pvt Ltd.: The move by the Reserve Bank is welcome however banks have been reluctant to reduce lending rates proportionately for similar actions by the RBI in the past. Mortgage rates have come down 50 to 70 basis points while the repo rates have dropped by over 200 bps. Unless the RBI strictly monitors and pushes banks to transmit these rates cuts to the borrowers, the move will not have the required impact on the economy. We need to drastically and aggressively lower interest rates to kick start the economy.
