ID :
25696
Tue, 10/21/2008 - 14:58
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Shortlink :
http://m.oananews.org//node/25696
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RBI cuts repo by one pc; loans to get cheaper
Mumbai, Oct 20 (PTI) After shoring up the banking system
with Rs 145,000 crore funds, the Reserve Bank Monday paved the
way for cheaper home, consumer, corporate and personal loan
rates by slashing its key short-term lending rate (repo) by
100 basis points.
The cut in repo, the first since 2004, would allow banks
to immediately borrow short-term funds from the apex bank at a
cheaper eight percent as against nine percent till now.
Finance Minister P. Chidambaram told reporters in New
Delhi that this move "will enthuse investors to continue to
take forward their investment proposals."
"It is a welcome step and clearly shows that the interest
rate regime is now on a descent curve," HDFC Bank's Deputy
Treasurer, Ashish Parthasarathy, told PTI here.
Earlier, R.B.I. cut the mandatory cash deposits that
banks must keep with it (C.R.R.) by 250 basis points after
five years, along with other measures to inject a total of Rs
145,000 crore into the system.
"It is a pro-growth measure," IDBI Bank's Chairman and
Managing Director, Yogesh Agarwal, said.
While the Cash Reserve Ratio (C.R.R.) cuts stopped rates
from moving upwards, the repo rate cut could see a softening
of deposit and lending rates, Parthasarathy said.
With India too experiencing the indirect impact of the
global liquidity constraint and in order to alleviate the
pressures and, in particular, to maintain financial stability,
it has been decided to reduce the repo rate by one per cent,
the Reserve Bank said in the announcement that comes ahead of
the scheduled review of its monetary policy stance on October
24.
The global financial situation continued to be uncertain
and unsettled, the Reserve Bank, said, adding that despite
action by regulators abroad, "confidence and calm is yet to be
fully restored in the financial markets."
"With softening of global crude and commodity prices and
inflation declining, growth has emerged as a bigger issue. The
repo rate cut is designed to push up growth," HDFC Bank's
Parthasarathy said. PTI JJ
with Rs 145,000 crore funds, the Reserve Bank Monday paved the
way for cheaper home, consumer, corporate and personal loan
rates by slashing its key short-term lending rate (repo) by
100 basis points.
The cut in repo, the first since 2004, would allow banks
to immediately borrow short-term funds from the apex bank at a
cheaper eight percent as against nine percent till now.
Finance Minister P. Chidambaram told reporters in New
Delhi that this move "will enthuse investors to continue to
take forward their investment proposals."
"It is a welcome step and clearly shows that the interest
rate regime is now on a descent curve," HDFC Bank's Deputy
Treasurer, Ashish Parthasarathy, told PTI here.
Earlier, R.B.I. cut the mandatory cash deposits that
banks must keep with it (C.R.R.) by 250 basis points after
five years, along with other measures to inject a total of Rs
145,000 crore into the system.
"It is a pro-growth measure," IDBI Bank's Chairman and
Managing Director, Yogesh Agarwal, said.
While the Cash Reserve Ratio (C.R.R.) cuts stopped rates
from moving upwards, the repo rate cut could see a softening
of deposit and lending rates, Parthasarathy said.
With India too experiencing the indirect impact of the
global liquidity constraint and in order to alleviate the
pressures and, in particular, to maintain financial stability,
it has been decided to reduce the repo rate by one per cent,
the Reserve Bank said in the announcement that comes ahead of
the scheduled review of its monetary policy stance on October
24.
The global financial situation continued to be uncertain
and unsettled, the Reserve Bank, said, adding that despite
action by regulators abroad, "confidence and calm is yet to be
fully restored in the financial markets."
"With softening of global crude and commodity prices and
inflation declining, growth has emerged as a bigger issue. The
repo rate cut is designed to push up growth," HDFC Bank's
Parthasarathy said. PTI JJ
