REVISION OF KEY LENDING RATES BY 50-BPS MAY HELP SPUR DEMAND

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With Indian economy still grappling with COVID – 19 crisis and prevalent demand concerns, especially in residential real estate, we hope that RBI will further cut policy rates by another 50 bps. This will help spur up demand across all segments, especially for residential real estate segment. We also feel that to encourage banks to lend more, a steeper cuts in Reverse repo rate is required, given that banks are hesitant to lend in these uncertain times.

Apart from cutting policy interest rate, the RBI should continue with targeted liquidity infusion, specifically for the NBFC sector as that will help support battered segments like MSMEs and real estate sector. With many parts of the economy still under partial lockdown, the Central Bank should look at extending the term loan moratorium beyond 31st August. In fact, with rising NPAs posing a severe threat the Central Bank should consider one-time loan restructuring specifically for the real estate sector”.

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