Business Mantra, Faridabad 29-09-2015
RBI announced 4th Bi-monthly Monetary Policy and announced 50 basis points cut in the short term lending rates from 7.25 % to 6.75%, while kept Cash Reserve Ratio unchanged at 4 %
This is double of what was expected by the Industry and Trade Circles. The announcement was made with a word of caution to the Banks/Financial Institutions /Non Banking Financial Companies to pass on the rate cut as early as possible to the borrowers. The rates have reached the lowest since 4 years.
By taking lead, as usual, SBI has immediately reduced the rate structure by 40 basis points. Soon Andhra Bank followed and reduced interest rates by 25 basis points. It is likely that more announcements from other Banks to follow.
But to the disappointment of depositors, deposit rates shall also be reduced.