Chamber of Small Industry calls for ceiling on interest rates for SMEs

The Chamber of Small Industry Associations (COSIA) has said that continuous raising of interest rates by the Reserve Bank of India (RBI) has not brought about desired results and the central bank should consider imposing a ceiling on interest rates charged to the SMEs.

The Chamber President MR Khambete said in a statement the base rate of banks between July 2010 and May 2011 has gone up by 150-300 basis points affecting credit growth.

The continuously raising of the repo rates has not brought about the desired results and hence the RBI must now look for some innovative measures to contain inflation, the chamber demanded.

The Chamber said the SMEs have suffered due to rise in interest rates and RBI could think of putting a ceiling on the rate of interest charged to SMEs, he said.