Banks await RBI credit policy outcome to decide on lending ratesBanks waiting RBI credit policy outcome to take a call on lending rates.
Apnaloan.com Research Bureau
19 Oct 2008
While the Reserve Bank of India (RBI) has already cut off the cash reserve ratio (CRR) by about 2.5 per cent. The bankers are awaiting a cue from RBI to take a call on the lending rate cuts.
Punjab National Bank (PNB) has already declared a 0.5 per cent cut in its housing, auto and educational loan rates after the CRR cut, most banks are waiting for the credit policy meet on October 24, 2008. RBI is also expected to cut key short term rates, apart from reducing the CRR in the mid-term policy review.
The rate cut by the RBI is expected to infuse more liquidity in the system and this being achieved through measures such as repo rate cut or allowing banks to borrow more through the Liquidity Adjustment Facility (LAF). If the trend continues, bankers are expected to re-open the sub-PLR loan channel to corporates in near future.