As of now, the country’s largest lender State Bank of India has the lowest base rate in the banking system at 9.30 per cent.
A cut in the lending rates by country’s largest lender, State Bank of India, has set the ball rolling for others. This bid to provide cheaper loans would lead to a competition, where it is the customer who would emerge as the real winner.
Reserve Bank Governor Raghuram Rajan today described Prime Minister Narendra Modi as being “ahead of us” but said his visits abroad need to be backed up with “action on the ground”.
Rajan today cut interest rate by 0.50 per cent, double of what was broadly anticipated
The cut brought down repo rate to 6.75 per cent, the lowest in four-and-half-years.
The RBI also announced some measures to increase flow of funds to Indian markets. It said that the limits for foreign portfolio investment in debt securities will be announced in rupee terms.
The central bank has cut FY16 real GDP growth estimate to 7.4% and expects a pick up towards the latter part of the fiscal.
There will not be any restriction in the area of operations of small finance banks.
The Reserve Bank of India has accorded flexibility to banks to deal with the stressed asset problem in the absence of a functioning bankruptcy code. This, however, is far from an optimal solution.
Asking industry to be patient, Rajan said that one reason behind the current difficulties of emerging markets is “impatience to regain growth” by overemphasizing old and ineffective methods of stimulus.
US Fed call does not change RBI’s monetary policy machinations, says RBI chief Raghuram Rajan
Raghuram Rajan took charge as the 23rd Governor of RBI on September 4, 2013 for a three-year term.
Will continue focus on taming inflation, resolving distressed projects
RBI Governor went against the views of four out of seven members in the TAC.
The RBI Governor said that turmoil in currency market has been long-coming and China is only the last step in it.