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TEA seeks RBI intervention for reduction of interest rates

30
Jul '09
RBI Governor Dr. D. Subba Rao has released the First Quarter Review of Monetary Policy 2009-10 and there is no change in the Key Rates.

Shri A. Sakthivel said that it was a disappointment to note that there was no announcement in the reduction of Interest Rate given for the MSME Export Sector, which is urgently needed to have a competitive edge for sustaining in the global market.

Shri A. Sakthivel also pointed out that our competing countries, mainly China, has reduced the interest rate given to exporters at 5.23%. When China is denting our market share in knitwear sector aggressively in US and EU markets, the reduction of interest rate has increasingly become a necessary one to stay in these markets.

While commenting on the Banks reaction to RBI signals for reduction of interest rates on previous occasions, Shri A. Sakthivel said the banks have been not reducing their interest rate in proportion to reduction of key rates by RBI and moreover, Banks have also been following wait and watch attitude. He also pointed out that when RBI has reduced its Repo Rate by 4.25% since October 2008, out of 77 Banks operating in India, only 7 Banks have reduced their interest rates above 2% and 16 Banks have reduced their interest rates at 2%.

Shri A. Sakthivel requested RBI's intervention immediately and advice the Banks to cut their Interest Rates so as to increase the competitiveness of MSME Export Sector in the Global Market.

Tirupur Exporters' Association


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