Explained: Why the RBI refused to cut interest rates

News:The Monetary Policy Committee(MPC) of the Reserve Bank of India has decided to keep the repo rate unchanged at 5.15% in its fifth bi-monthly monetary policy statement. Facts: Issues before RBI: The RBI’s most important mandate is to maintain price stability which means RBI is required by law to maintain retail inflation based on Consumer… Continue reading Explained: Why the RBI refused to cut interest rates

Explained: Why RBI may cut interest rates tomorrow and why it may not be enough

News:The Reserve Bank of India’s Monetary Policy Committee is set to announce its bi-monthly policy review on October 4,2019. Facts: What is likely to happen in the policy review? The RBI is likely to cut the repo rate by anywhere between 35 to 40 basis points due to following reasons- Inflation is under control.Hence,there is… Continue reading Explained: Why RBI may cut interest rates tomorrow and why it may not be enough

External benchmark-based lending must: RBI

News:The Reserve Bank of India (RBI) has made it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark rate from October 1st,2019. Facts: The RBI has given the options to banks for external benchmark rates which are (a) RBI repo rate… Continue reading External benchmark-based lending must: RBI

Explained: Reasons, implications of repo rate cut

The Reserve Bank of India’s(RBI) monetary policy committee (MPC) has lowered the repo rate by 35 basis points to 5.4%. Repo stands for ‘Repurchasing Option’.It refers to the rate at which commercial banks borrow money from the RBI. The Monetary Policy Committee(MPC) is a committee of the Reserve Bank of India.The MPC is made up… Continue reading Explained: Reasons, implications of repo rate cut

RBI plans to formalise linking of new loans to repo rate

The Reserve Bank of India(RBI) is considering asking banks to link loans to an external benchmark such as the repo rate to improve transmission of policy rates and foster economic growth. Repo stands for ‘Repurchasing Option’.It refers to the rate at which commercial banks borrow money from the RBI. Currently,bank loans are linked to marginal… Continue reading RBI plans to formalise linking of new loans to repo rate

RBI lowers repo rate by 35 basis points to 5.40%

The Reserve Bank of India’s (RBI) monetary policy committee (MPC) has lowered its repo rate by 35 basis points to 5.4%.Repo stands for ‘Repurchasing Option’.It refers to the rate at which commercial banks borrow money from the RBI. RBI has also kept the door open for lowering rates further by retaining an accommodative policy stance.… Continue reading RBI lowers repo rate by 35 basis points to 5.40%

RBI Governor, state-run bank CEOs discuss slow rate transmission

The Reserve Bank of India Governor has discussed the issues of banking sector with the officials of Public sector banks(PSBs) and Indian Banks Association(IBA). During the meeting,the issue of less than desired level of transmission of monetary policy rates was discussed with the banks.Even though the RBI has cut the Repo rate by 75 basis… Continue reading RBI Governor, state-run bank CEOs discuss slow rate transmission

Easy money can’t revive economy: SBI report

According to State Bank of India report,easy money policy will be ineffective to push the slow growth engine. An easy money policy is a monetary policy that increases the money supply usually by lowering interest rates.It occurs when a country’s central bank decides to allow new cash flows into the banking system. Recently,the Reserve Bank… Continue reading Easy money can’t revive economy: SBI report

RBI cuts interest rate by 25 bps

The Reserve Bank of India(RBI) Monetary Policy Committee has unanimously cut the repo rate by 25 basis points from 6% to 5.75%. Repo stands for ‘Repurchasing Option’. Repo rate refers to the rate at which commercial banks borrow money from the RBI. The reverse repo rate was also lowered to 5.50% from 5.75%.The reverse repo… Continue reading RBI cuts interest rate by 25 bps

RBI may cut interest rate by at least 25 bps on June 6: Experts

According to experts,the Reserve Bank of India’s Monetary Policy Committee (MPC) may cut the interest rate to boost up the economic growth which dropped to a five-year low in the final quarter of 2018-19. The rate cut is needed to address weakening credit availability as Non-banking financial companies(NBFCs) remain in turmoil representing a significant bottleneck… Continue reading RBI may cut interest rate by at least 25 bps on June 6: Experts

New SBI rules link savings bank interest to repo rate: what has changed, why

State Bank of India (SBI) has linked its interest rate on savings account with balance above ₹1 lakh and short-term loans to Reserve Bank of India’s(RBI) repo rate. SBI had taken this decision even though RBI had deferred the plan to link the rate of interest to external benchmarks like the repo rate or Treasury… Continue reading New SBI rules link savings bank interest to repo rate: what has changed, why

Linking small loans to external benchmark after further talks

The Reserve Bank has said that it will hold further discussions with banks on linking interest rates on personal,home,auto and MSME loans with the external benchmark rates. In December 2018,Reserve Bank of India (RBI) had proposed a major change in the way banks price their loans.It had said that banks will have to link the… Continue reading Linking small loans to external benchmark after further talks

RBI cuts repo rate to 6%, lowers GDP forecast to 7.2%

The six-member Monetary Policy Committee of the Reserve Bank of India has cut its benchmark policy rate,repo rate by 0.25% to 6%.Repo stands for ‘Repurchasing Option’.It refers to the rate at which commercial banks borrow money from the RBI.The rate cut comes in the backdrop of a slowdown in consumption. demand,weakening investment activity and overall… Continue reading RBI cuts repo rate to 6%, lowers GDP forecast to 7.2%

New loan pricing scheme may be put off

The Reserve Bank of India(RBI) may extend the deadline for banks to shift to the new loan pricing regime which was scheduled to be implemented from April 1.This new external benchmark rate will be applicable for floating rate loans extended to individuals and small businesses. Earlier,Reserve Bank of India (RBI) had proposed a major change… Continue reading New loan pricing scheme may be put off

SBI links savings account, short term loan rates to repo rate

State Bank of India (SBI) has decided to link its interest rate on savings account with balance above ₹1 lakh and short-term loans to Reserve Bank of India’s (RBI) repo rate. Repo stands for ‘Repurchasing Option’.It refers to the rate at which commercial banks borrow money from the RBI.It is one of the main tools… Continue reading SBI links savings account, short term loan rates to repo rate