RBI brings good tidings for borrowers
“There will be monetary transmission,” said HDFC Bank MD & CEO Aditya Puri. RBI governor D Subbarao said at a press conference that banks had assured the central bank that loan rates would be brought down through a cut in the base rate.
IDBI Bank was the first to swing into action, reducing its base rate by 25 bps to 10.25%. Later in the day, RBS too cut its base rate by 75 bps to 9%.
“Banks have an urgency to increase their credit growth; so, they will be looking at all opportunities, either by reducing the base rate or some segments where they can lend better,” said SBI chairman Pratip Chaudhuri. SBI's assets and liabilities committee (Alco) will meet on Wednesday to take a call on the bank's lending and deposit rates, he added. The cut in the CRR will free up R18,000 crore of liquidity for the system as a whole.
“The indication that you are getting from all bankers is that there will some transmission on the lending rates. On deposit rates, we are going to watch the situation, so that is probably the best news that small customers can look for,” said ICICI Bank MD & CEO Chanda Kochhar.
While the RBI’s move to cut
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