PM to meet industry chambers to seek ways to tide over liquidity crunch

PM to meet industry chambers to seek ways to tide over liquidity crunch


New Delhi: As part efforts to shore up confidence eroded by the global financial rout, Prime Minister Manmohan Singh will on Monday meet here captains of Indian industry in an attempt to seek measures to tide over the liquidity crunch.

Ratan Tata, Anand Mahindra, Mukesh Ambani, Anil Ambani, K P Singh, Sunil Bharti Mittal and Deepak Parikh are among those expected to attend the meeting -- two days after RBI decided to inject another Rs85,000 crore into the financial system by revising downward short-term lending rate and key deposit requirements for banks.

Presidents of the three apex chambers -- Assocham, CII and FICCI -- Sajjan Jindal, K V Kamath and Rajeev Chandrasekhar will also participate in the deliberations.

With the RBI providing Rs2,65,000 crore in the last one month, one of the industry’s main demands has largely been met. However, industry sources feel more was required since the overnight inter-bank lending rates are still quite high.

The RBI move to pump in money into the economy is in line with several central banks across the world providing more money to their cash-starved financial institutions.

While the government has given assurances on the safety of Indian banks, high interest rates ranging between 14-17% have particularly impacted sectors like real estate and automobile. The aviation industry, which was provided a much needed help in the form of cut in jet fuel prices, is reeling under high cost of operations.