Banks have cut rates
but RBI Guv thinks there's room for more
Reserve Bank of India Governor Urjit Patel said that given the quantum of reduction in repo rates that have taken place over the past two years, there is some more scope for reduction in lending rates. Error loading player: No playable sources found The Reserve Bank of India at its monetary policy meet earlier this week took a call to hold rates and shifted its stance from accommodative to neutral. But today, Governor Urjit Patel said that given the quantum of reduction in repo rates that have taken place over the past two years, there is some more scope for reduction in lending rates. “There is scope for further reduction in lending rates. The weighted average lending rate should come down,” he said while addressing a press conference at the end of an RBI board meeting. Patel added that banks have benefited from huge deposits after demonetisation scheme was rolled out. Current and savings account (CASA) deposits have come into the system and the weighted average lending rate has been considerably less. He added that rates have been reduced for housing and personal loans but there are other areas where rate cut benefits can be passed on to.
State Bank of India on January 1 decided to cut its marginal cost of funds-based lending rate (MCLR) across all tenors by 90 basis points (bps) and the other banks followed suit. The banks have set stage for low cost loans and have cut rates by around 1 percent. Separately, there have been concerns that the RBI's decision to state in the policy statement that its monetary policy outlook stance changed accommodative to neutral. But Patel clarified that the comment was not made with regards to the CPI inflation. He pointed out that since September, it has been difficult to bring down inflation and to bring down headline inflation towards 4.0 percent, there has to be significant decline in inflation expectations.
Inflation expectations is a metric that tracks people's outlook on prices, and is believed to drive the future trajectory of inflation. Even as actual inflation remains under control, the expectation measured by the RBI remains stubbornly high. At the press conference, Patel parried a question regarding how much deposits had come back into banks following demonetisation, saying the RBI would release a number when it had a verifiable number, rather than an estimate
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Reserve Bank of India Governor Urjit Patel said that given the quantum of reduction in repo rates that have taken place over the past two years, there is some more scope for reduction in lending rates. Error loading player: No playable sources found The Reserve Bank of India at its monetary policy meet earlier this week took a call to hold rates and shifted its stance from accommodative to neutral. But today, Governor Urjit Patel said that given the quantum of reduction in repo rates that have taken place over the past two years, there is some more scope for reduction in lending rates. “There is scope for further reduction in lending rates. The weighted average lending rate should come down,” he said while addressing a press conference at the end of an RBI board meeting. Patel added that banks have benefited from huge deposits after demonetisation scheme was rolled out. Current and savings account (CASA) deposits have come into the system and the weighted average lending rate has been considerably less. He added that rates have been reduced for housing and personal loans but there are other areas where rate cut benefits can be passed on to.
State Bank of India on January 1 decided to cut its marginal cost of funds-based lending rate (MCLR) across all tenors by 90 basis points (bps) and the other banks followed suit. The banks have set stage for low cost loans and have cut rates by around 1 percent. Separately, there have been concerns that the RBI's decision to state in the policy statement that its monetary policy outlook stance changed accommodative to neutral. But Patel clarified that the comment was not made with regards to the CPI inflation. He pointed out that since September, it has been difficult to bring down inflation and to bring down headline inflation towards 4.0 percent, there has to be significant decline in inflation expectations.
Inflation expectations is a metric that tracks people's outlook on prices, and is believed to drive the future trajectory of inflation. Even as actual inflation remains under control, the expectation measured by the RBI remains stubbornly high. At the press conference, Patel parried a question regarding how much deposits had come back into banks following demonetisation, saying the RBI would release a number when it had a verifiable number, rather than an estimate
Read more for Indian Stock Tips - http://bit.ly/ace_services
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