RBI to reduce SLR by 50 basis points: Investment revival to take a few quarters
It is expected that around Rs 40,000 crore of surplus liquidity will be infused in the system. This positive sentiment has come in the market after theRBI’s (Reserve Bank of India) decision to reduce the statutory liquidity ratio (SLR) by 50 basis points. India Inc. believes that this will keep liquidity buoyant, help meet industry’s short-term debt requirements and move stalled projects.
Cash crunch had slowed down most of the industries in the last few years. However the industry leaders speculate that the revival in the investment cycle might take a couple of quarters.
Sunil Mantri the chairman of Mantri Realty stated that the real estate sector had been struggling to raise funds and the SLR cut would hopefully make funds available for the sector.Mantri also stated that the scenario is changing slowly with the drop in inflation and improvement in GDP. The market is reviving and the banks and private equity players who had sighed away from the industry are showing interest again. Mantri said the company was looking to raise funds to launch new projects but has not yet finalised the details.
Boman R Irani the chairman and managing director of Mumbai based-realty firm Rustomjee stated that the SLR cut will make more funds available for the companies across sectors for capital expenditure. However he thinks that it would have helped more if the apex bank had cut the rates.Irani feels that it would have translated into more funds in the hands of customers and led to faster economic revival.
Source- Financial Chronicle
