Expect RBI to continue with easing policy rates - Mr. Pankaj Bansal, Director - M3M India Ltd

Commenting on the third quarter review of monetary policy by RBI, Mr. Pankaj Bansal, Director, M3M India Limited said, "RBI's decision to resort to reduction in the Repo rate with immediate effect is a welcome move. The reduction of 0.25%, coupled with a simultaneous and equal cut in CRR shall result in a release of an additional Rs. 18,000 crore in the banking system. This may lead to a softening of lending rates to the industry. In turn, this shall help the industry access cheaper funds and improve operating margins.

This reduction will reduce cost of borrowing to home buyers, leading to higher absorption of units sector across the country. We sincerely hope that the government will, in the forthcoming budget, take measures such as: giving infrastructure status to the real estate sector, allowing ECB for high-segment housing, increasing tax rebate on housing loans and reducing import duty on capital goods for construction and infrastructure.

Finally, we sincerely hope that in view of RBI's own projection that India's GDP growth is likely to come down to 5.5% from 5.8% expected earlier, the central bank will continue with easing policy rates, thus help revive the economy's growth rate."

Source : Equity Bulls

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