FICCI all praise for RBI’s monetary policy

The Federation of Indian Chambers of Commerce and Industry (FICCI) has come out with a statement about the monetary policy released by the Reserve Bank of India. "It is reassuring to note that the RBI continues with its accommodative stance to accelerate economic growth," president of FICCI, Uday Shankar said in the statement adding that the direction of the policy statement is positive.

Stating that the Non-Banking Financial Companies (NBFC) have emerged as a major source of organised lending, Shankar said that the inclusion of NBFCs in the Targeted Long term repo operation (TLTRO) on tap scheme for specified stressed sectors has been noted. "However, we have noted that banks continue to favor high rated NBFCs and this distortion needs to be corrected to ensure a broad-based outreach," he added.

Speaking about the micro, small, and medium enterprises (MSME), the FICCI president said that they have been under tremendous pressure and to incentivise new credit flow to the MSME borrowers is a big positive. This indicates the targeted approach towards meeting the needs of the most stressed, Shankar added.

The RBI's move to allow retail investors to open Gilt accounts with RBI is a major structural change placing India amid few selected countries with a similar facility, Uday Shankar said. This category of investor will be given an opportunity to participate in Gilt market directly, he added.

"The assurance and the clear communication by the Governor with regard to liquidity management and the government borrowing programme infuses optimism," the statement read.