RBI to cut interest rates by sharp 50 basis points

Posted By: Ria
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Reserve Bank of India
New Delhi, Apr 17: The RBI on Tuesday, Apr 18, has decided to cut the interest rates by sharp 50 basis points to boost the country's economy but the top banks declared that it will go down but not immediately.

Pratip Chaudhuri, chairman, State Bank of India has been quoted as saying, "Of course, the rate cuts will be passed on."

"Let me admit, after the last CRR (Cash Reserve Ratio) cut of 75 basis point also the transmission has not happened fully because that came in the month of March. So, we were just slightly watchful of the liquidity situation," he said.

"Largely in our case it would be for SMEs but it is for our asset liability committee which will be meeting today (Tuesday) evening and soon thereafter to take a call," he added.

The reduction in the interest rates would be across the deposits as well as in lending rates, said Chanda Kochhar, managing director and chief executive officer of ICICI Bank.

"Clearly it will have to be across both, deposits and lending rates and in fact the deposit rate decrease is absolutely required because otherwise the costs of funds for the banks would not go down," she added.

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