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CII moots 50 bps cut in Bank Rate

The Confederation of Indian Industry has suggested a 50 basis point reduction in Bank Rate to counter depressed demand for commercial credit.

The chamber said in a statement issued in New Delhi on Thursday that there is also a need to increase freedom for banks to set the savings rates, subject to ceiling prescribed by the RBI.

While making suggestions for the slack season Credit Policy 2002-03, the chamber stated that the focus should be to effect liquidity in the short-term via the traditional tools of the Monetary Policy and to usher in deeper structural reforms in the financial system.

CII also suggested the formulation of a roadmap to reduce CRR from the current level of 5.5 per cent of net demand and time liabilities to 3 per cent.

The chamber said that SLR should also be reduced to 15 per cent from the current level of 25 per cent.

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