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  1. #1
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    Dec 2009


    Default Repo rate cut: Home, car l o a n s to get cheaper

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    In line with expectations, the Reserve Bank of India (RBI) Chief D Subbarao today announced a 50 bpp (0.5 per cent) cut in repo rate, bringing it down to 8 per cent, in its annual credit policy.

    The Cash Reserve Ratio (CRR), or the percentage of deposits commercial banks keep with the RBI, was left unchanged at 4.75 per cent. Also, the RBI said banks will not levy pre-payment charges on home *****.

    Highlights of RBI's annual credit policy for FY 2013

    Growth projected at 7.5 per cent in FY 2013: Subbarao
    CRR unchanged at 4.75 per cent
    Liqudity conditions have eased in recent weeks: Subbarao
    Liqudity conditions moving towards RBI comfort zone: Subbarao
    RBI move follows sharp deceleration in Oct-Dec period: Subbarao
    Deviation from growth trend is modest: Subbarao
    CPI inflation shows price pressure still high: Subbarao
    MSF reduced by 50 bp to 9 per cent
    Credit growth pegged at 17 per cent in FY 2013

    The policy was presented amid rising demand for interest rate cut as inflation has dipped considerably since the monetary tightening regime first began two years ago.

    The central bank has raised lending rates 13 times since March 2010 in a bid to control prices which had been on a relentless upward spiral for months in a row- the wholesale price based inflation had hovered around as 9 per cent almost throughout the previous year.
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