Bank of India
BANKING
The Reserve Bank of India has slashed the Benchmark Policy Rate- Repo by 25 bps to 7.75% (with immediate effect). Similar action was seen on the Cash Reserve Ratio (CRR) front too, which was lowered to 4% with effect from 9th February 2013.
Mrs. V. R. Iyer CMD, Bank of India - its a positive move to address Growth and Structural Liquidity concerns
Jan 29, 2013
The Reserve Bank of India has slashed the Benchmark Policy Rate- Repo by 25 bps to 7.75% (with immediate effect). Similar action was seen on the Cash Reserve Ratio (CRR) front too, which was lowered to 4% with effect from 9th February 2013.
The move signals RBI’s intent of supplementing the recent GoI’s initiatives to bring the economy on a growth track.
The action on CRR front is expected to infuse around Rs. 18,000 crore of primary liquidity into the system.
The biggest comfort has come in the form of the guidance given by the RBI on the growth and inflation front. It has acknowledged the softening of non-food prices and hence, it sees some window available to address the growth concerns in future too.
At the same time, the guidance comes conditioned with a strict vigil over future growth-inflation dynamics and dependency of further policy moves on it.
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