WHILE Reserve Bank of India ( RBI) governor Raghuram Rajan has been criticising banks for not passing on the reduction in the repo rate
cuts to borrowers, State Bank of India ( SBI) chairperson Arundhati Bhattacharya virtually dismissed his reasoning on Thursday on the ground that it is not relevant in the Indian context.
Global Banking News-December 4, 2015--SBI head says repo rate
is a blunt instrument
The Reserve Bank of India cut the repo rate
, for a third time this year, by 25 basis points (bps) in its policy review on June 2.
In the latest policy, governor Raghuram Rajan cut the MSF rate by 25 basis points and raised the repo rate
by 25 bps to 7.
Based on an assessment of the present, on prospective macroeconomic situations, we have decided to keep the policy repo rate
under the Liquidity Adjustment Facility (LAF) as also the Cash Reserve Ration (CRR) unchanged.
The benchmark repo rate
, which is the rate at which Reserve Bank of India lends to commercial banks, has been revised to 8.
In July, 2011, the Riksbank raised the repo rate
Usually, in the downward phase of the interest rate cycle, banks delay implementing the lower interest rates as a lowering of the repo rate
opens the spread and the banks find themselves marginally more profitable up to that point where they have to introduce a lower prime rate.
Though the hike in repo rate
fell in line with expectations, the market was hoping for only a 25 basis points cut in reverse repo rate
The Riksbank (central bank) will leave its repo rate
unchanged at 4.
According to Reuters, the apex bank has kept its repo rate
steady at 6.
We are hoping for a 50- basis points cut in the repo rate
as retail inflation has started receding," confederation of India Industry director general Chandrajit Banerjee said.