pass the interest rate cuts to consumers: CUTS International
October 05, 2016
Soon after the Reserve
Bank of India announced a 25 basis point cut in the repo rate, the
industry is demanding that the banks should pass the rate cuts to
the consumers immediately.
Experts opine that the forthcoming festive season and
rationalisation of food prices provides an opportunity to revive
demand, and consequently industrial growth.
In the Fourth Bi-monthly Monetary Policy Statement, 2016-17, RBI
has cut repo rate by 25 bps to 6.25 per cent. Reverse repo rate
under the LAF stands adjusted to 5.75 per cent, and the marginal
standing facility (MSF) rate and the Bank Rate to 6.75 per cent.
All six members of the monetary policy committee voted in favour
of cutting repo rate.
“Such rate cut complements the efforts of government of which is
working hard towards institutional and regulatory reforms in the
country, the latest such move being passage of constitutional
amendment for adoption of goods and service tax,” said an industry
While the government and RBI are doing their bit, the industry,
and banks in particular, will have to contribute to revive the
consumption led growth cycle in the economy.
Agreeing with the decision to cut rates, Pradeep S. Mehta,
Secretary General, CUTS International, noted, “Banks must pass on
relief to the consumers, who could then benefit from lower
The forthcoming festive season and rationalisation of food prices
provides an opportunity to revive demand, and consequently
industrial growth, which should not be missed, he added. (KNN
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