A recent press report said that the recent rate hike by the Reserve Bank of India in spite of slowing down economy has disappointed the Indian corporates.
In his statement Mr. Harsh Pati Singhania, Managing Director of JK Paper said that it has already being seen that the higher interest rates has resulted in deterioration of investments for growth especially, the most affected sector is the infrastructure sector and also it has been depressing the consumer from spending.
He added that there has been enough proof that continuously increasing the interest rates would not help in curbing inflation as the major reasons behind inflation is something else.
According to Mr.V.Ashok, Group Chief Financial Officer of Essar Group the banks would not pass on the increase in key interest rates on to the customers as there has been a slowdown in growth and credit off take.
According to Crisil, the credit rating agency inflation has not only been high but it has also being continuing and in its view the rate hike seems to be good as the inflation has to be brought down to 5 per cent as well as should be maintained at around the same level in order to curb the expectations of inflation.
Recently banks have asked the RBI to take a break from its monetary tightening cycle which has made home loan and other loans very expensive.