The Reserve Bank of India (RBI) governor Bimal Jalan reiterated concerns on Thursday about the country's industrial slowdown, but gave no commitment to review interest rates despite the latest cut in US rates.
Speaking to reporters after a meeting of the central board of directors of the RBI here, Jalan said there were no direct linkages between the US Federal Reserve's rate cuts and the domestic market.
"They are part of the environment which we take into account along with everything," Jalan said when asked whether the Fed rate cut would prompt a similar response from the RBI.
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Meanwhile, in an answer to question on the general shape of the economy, Jalan said, "the industrial slowdown is an area of concern and we are keeping a close watch".
Although he declined to comment on another round of interest rate cut, he said, "there is no direct linkage between the Fed rates and the RBI rates. They are part of the environment which we take into account with everything else".
The governor had come down to attend the reserve bank's reconstituted board meet. The board met in Kolkata today to review among other things the recently announced credit policy. "We have taken a positive view on the credit policy," informed the governor. The board also seems to have been content with the present forex position.
Meanwhile, the Indian Chamber of Commerce represented to RBI on arbitration of NPA and quick unlocking of funds and for a faster liquidation process. The chamber also asked for an increased degree of autonomy for venture capital funding to banks with respect to small and medium business.
Confederation of Indian Industries on the other hand urged the governor to bring in guidelines allowing lending below the PLR in certain strategic sectors.
Bengal Chamber of Commerce and Industry asked for concessional credit to a few critical sectors and had also asked for a further cut in interest rate.
While the representation by the chambers were more of a one sided hearing, the governor said it will look into all these.
The new board consituted two months back has K Madhava Rao, Suresh Krishna, Mihir Rakshit, N R Narayan Murthy, H P Ranina and A P J Abdul Kalam as its new board members attending the meet today.