Mumbai: RICS has welcomed the reduction of CRR by the Reserve Bank of India (RBI) “The 25 basis point cut in the cash reserve ratio by the RBI, will definitely aide the improving liquidity situation in the market, both for businesses and consumers. It is anticipated that this marginal cut in CRR will help release addition Rs 17,000 crores of liquidity into the system, thus ensuring better availability of credit. It is also prudent to mention, that this change in the cash reserve ratio is a statement of direction by the apex bank, where if inflation comes down to within the acceptable limits, easing interest rates can be expected in the future,” said Sachin Sandhir, Managing Director, RICS South Asia.
“Given the fact that the mortgage or home loan interest rates have increased over the last financial year, in tandem with increasing policy rates as a counter measure of rising inflation – the marginal cut in the cash reserve ratio is indicative of expected on-going decline in home loan interest rates. However, how soon these rate cuts will take place will depend on various factors that influence RBI policy such as inflationary pressures, fiscal deficit limits etc.,” he added.
On the governments decision to allow on FDI in retail he said “For long now, the retail sector in India has been facing numerous and on-going challenges with respect to processes, technology, supply chain, real estate etc., resulting in fewer investments in the sector as compared to others, which have seen growth occur at a much faster pace. While there are still some policy hurdles that need to be overcome in the implementation of this directive, FDI will definitely prove to be a powerful catalyst for the much required growth in the retail sector. This will have a positive spill over on real estate as well, as the demand for retail property will witness renewed demand and uptake along with improved investor confidence in the sector.”