The central Reserve Bank of India (RBI) received a request from an industry lobby on Thursday to reduce cash reserve ratio and repo rate by 1 per cent, so that liquidity can be pumped into the markets. 

Furthermore, the Associated Chambers of Commerce and Industry of India (Assocham) in its recommendations has appealed to RBI to allow banks to borrow against government securities and make avail dollars directly to oil companies, instead of steering them through the market for the purchase of crude. 

The president of Assocham, Sajjan Jindal, who submitted the recommendations to the RBI governor, also included that various Indian companies are now looking at rupee-funding because of the uncertainty of dollar financing and additionally it has also become tough to raise dollars within the RBI approved spreads. 

 “The level of credit needed to be redefined, taking into account the base effect while planning for the future, instead of squeezing credit, which would seriously impact the survival and sustenance of industry,” informed Assocham. 

In the present scene, the Indian industry borrows money at cost, which varies between 25-28%. Assocham said that this rate is very high and it has resulted in shrinking of the margins. 

Lastly, another request to ease the norms that rule external commercial borrowings has also been made, so that industry can be helped to raise funds from abroad.