Interest rates cut by a quarter points by RBI
Posted on: 06/Oct/2016 11:57:19 AM
Reserve Bank of India Governor Urjit Patel who took up as governor cut interest rates by a quarter points in his debut policy. This is the first decision announced by the newly formed six-member monetary policy committee. It was a unanimous vote in favour of the rate cut. Industrialists who were requesting the government to cut the interest rate are happy now because the business will grow. It is also understood that more loans will be disbursed. At the same time those who have taken home loan and car loan are thinking when they will get this interest cut rate benefit. Because when Governor Urjit Patel made this announcement has mentioned that the banks should pass over the benefit to its customers.
But the customers did not get the full benefit. The central bank has reduced the key interest rate by 175 basis points since January 2015. The Reserve Bank of India (RBI) today cut lending rates by 25 basis points from 6.5 to 6.25, paving the way for a possible reduction in the EMIs of housing and car loans.
With the decision, the repurchase rate, or the short-term lending rate charged by the central bank on borrowings by commercial banks, stands lowered to 6.25 per cent. The reverse repurchase rate also automatically stands lowered to 5.75 per cent
In good news for consumers ahead of Diwali, bankers today promised to swiftly pass on the 0.25 per cent rate cut effected by the Reserve Bank to borrowers, a move that would lower home, auto and corporate loans.
