The RBI also "nudges" the governments at the Centre and states to cut the high indirect taxes on fuel products to bring down the pressure on prices, Raj Kiran Rai G, the chairman of industry lobby Indian Banks Association, wh
"Over the years, the Reserve Bank's efforts in improving transmission to deposit and lending rates of banks have started to bear some fruits particularly with the introduction of the external benchmark system," it said.
Housing Finance companies shares gained up to 8.4 per cent after RBI announced a special refinance facility of Rs 15,000 crore to SIDBI, Rs 25,000 crore to NABARD, and Rs 10,000 crore to HFCs to support liquidity
RBI rate cut apart, in the absence of the possibility of a quick revival in investments, good monsoon this year, after two failed years, is crucial for boosting rural demand and also manufacturing and services sectors.
Since banks are required to cut rates for existing customers in the same proportion as the cut in base rate, they are increasing their spread for new customers so that they always have a decent margin with them to bear the pr