Mumbai, June 6
Bankers have hailed the third successive rate cut by the Central bank as a move that will boost growth, but remained non-committal on the specifics of how they intend to pass on the benefits to the borrowers.
Speaking after the policy review today, RBI Governor Shaktikanta Das hailed banks’ effort on transmission, but asked them to do more through “higher and faster” lending rate cuts to help boost demand in a slowing economy.
Das said bankers have so far passed 0.21% of the 0.50% rate cuts since January, going by the weighted average lending rate but this has helped only new borrowers and not those already in the credit market.
“To achieve sustained growth, there is also a need for a more efficient rate transmission framework,” Tata Capital MD Rajiv Sabharwal said.
“Given the need for growth, banks would take a call on further rate cuts,” industry lobby Indian Banks’ Association chairman Sunil Mehta said.
The GDP growth-focused rate cut and shift in the monetary policy stance to accommodative, and comments centred around liquidity and also the crisis at NBFCs were hailed by the bankers.
“The decision to shift the policy stance to ‘accommodative’ will simultaneously help the financial system navigate to a lower interest rate regime and also look into growth concerns,” SBI chairman Rajnish Kumar said.
ICICI Bank’s global markets head B Prasanna said the policy is “very positive” and there is a scope for more accommodation because of the focus on supporting growth and bolstering private investment.
He termed Das’ statement on crisis within some NBFCs, where the Governor promised all possible interventions to ensure financial stability, as “reassuring”.
Economists at HDFC Bank said there can be one more rate cut in the August review and possibly one after that as well, given the rising headwinds to growth.
Bank of India managing director Dinabandhu Mohapatra said the RBI’s intent is to be supportive of growth in the near-term and welcomed the leverage ratio announcement as a positive for the sector. — PTI
RBI calls for higher, faster transmission
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RBI Governor Shaktikanta Das hailed banks’ effort on transmission, but asked them to do more through “higher and faster” lending rate cuts to help boost demand in a slowing economy
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Bankers have so far passed 0.21% of the 0.50% rate cuts since January, going by the weighted average lending rate but this has helped only new borrowers and not those already in the credit market
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from The Tribune http://bit.ly/2WOCs6S
via Today’s News Headlines
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