Karnataka - Bangalore   

RBI move to increase CRR welcomed

Bangalore: The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has welcomed the Reserve Bank of India’s (RBI) move to increase the cash-reserve ratio (CRR) in the banking system.

The federation perceives the stipulation by the RBI that the CRR be raised in a two-step manner in the next few weeks as a move aimed at controlling inflationary pressure.

In a press release here on Thursday, the FKCCI welcomed the RBI move observing that it will “reduce considerable liquidity from the market.”

However, the FKCCI expressed concern over other moves that the RBI may initiate.

In this regard, it referred to the Finance Minister’s recent observation that there may have to be a trade-off between the objectives of promoting growth and controlling inflation.

Most significantly, the FKCCI expressed concern about a possible increase in interest rates which it said would be “unfortunate”.

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