Both lending and deposit rates are expected to see a downward revision following the RBI?s decision to cut CRR and repo rate by 25 bps each
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Mumbai: Borrowers could see better days ahead as banks are expected to cut lending rates following the Reserve Bank of India?s (RBI) decision to cut short-term lending rate as well as unlocking Rs18,000 crore by slashing cash reserve ratio (CRR) by 0.25%, reports PTI.
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Soon after the Reserve Bank unveiled its mid-quarter review of the monetary policy, several bankers hinted that they may consider rate cut in their Asset Liability Committee (ALCO) meeting.
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RBI governor D Subbarao in the third quarter monetary policy review surprised the market by cutting short-term lending rate called repo by 0.25% to 7.75% and CRR by similar margin to 4%, releasing Rs18,000 crore primary liquidity into the system.
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Commenting on RBI?s action, SBI managing director A Krishna Kumar said ?a rate cut is likely. Rates on advances and deposits could come down simultaneously. The RBI?s action is positive?.
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Indian Overseas Bank executive director AK Bansal said the RBI?s action will result in moderation of interest rates in the coming days. Both lending and deposit rates are expected to see a downward revision which will improve growth prospects, he said.
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According to Canara Bank executive director AK Gupta, the bank would consider interest rate cut in the light of the RBI policy action.
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Echoing similar views, Bank of India executive director
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Tushar Poddar, managing director and chief
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Kotak Mahindra Bank chief economist Indranil Pan said RBI delivered a very balanced policy. ?As expected, they chose the calibrated path of a 25 basis points cut in the repo and the reverse repo rates. They wanted to avoid a repeat of April 2012 when the RBI had cut the repo rate by 50 basis points and then had to pause with surprises creeping in from the inflation side,? he said.
Source: http://www.moneylife.in/article/home-auto-loan-rates-could-see-moderation-bankers/31031.html
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