Leading industry chambers on Monday asked the Reserve Bank of India to reduce lending rate and take measures to check rupee appreciation against the US dollar in the Credit Policy to be announced on Tuesday.

RBI unlikely to cut bank rate

"The expectations from this year's Credit Policy have significantly increased in view of the change in government and for instilling confidence in the capital market," Assocham president M K Sangvi said.

He said there was a need to realign the lending rates in India with international rates.

"The two main expectations from the Monetary Policy announcement this year are RBI's stance on rupee value and its appreciation, and the right regulatory regime that ensures availability of investible funds at internationally benchmarked rates for all sectors of the economy," he added.

PHD Chamber of Commerce said RBI should cut bank rate by 1.0 per cent to 5.0 per cent, while cash reserve ratio should be reduced to 3.5 per cent.

"RBI may bring down bank rate and cash reserve ratio by one per cent each. There is a need to bring down the PLR by reducing high transaction costs in the banking system," the chamber said in a memorandum to the banking regulator.

Both Assocham and PHDCCI said interest rate structure in the country was still high and complex compared to that in international markets, and was affecting the competitiveness of the Indian industry.