RBI surprises, cuts CRR, repo rates by 25 bps today
The economy grew by 6.5 per cent in 2011-12.
"We will pass on (the benefit of rate cut) to our borrowers without compromising on the Net Interest Margin", said SBI Chairman Pratip Chaudhuri.
The RBI also cut the March end inflation projection to 6.8 per cent, from 7.5 per cent earlier.
While stock markets initially cheered RBI's rate cut with the BSE Sensex moving up by 91 points, however, the Sensex declined to 19,991, down by 115 points over yesterday's close.
Asked about a possible cut in deposit and borrowing rate, ICICI Bank CEO and Managing Director Chanda Kochhar said "there is going to be a transmission on the lending side, while on the deposits front, we will wait and watch. There isgoing to be a lag ... The cuts are positive for EMIs".
Commenting on the policy action, Commerce and Industry Minister Anand Sharma said: "It is a positive step which will infuse liquidity and help in catalysing growth."
Planning Commission Deputy Chairman Montek Singh Ahluwalia said the CRR cut will have impact on long term interest rates.
"I think this is the right thing to do at this point of time given that (the decline) in economy is beginning to bottom out," he said.
The repo rate, which was cut last in April 2012, stands revised at 7.75 per cent, while the liquidity infusing CRR stands at 4 per cent effective February 9. CRR was last reduced by 0.25 per cent in November 2012.
Supporting the government's recent reform push, RBI said measures like opening