Bankers said on Friday they expect the Reserve Bank to cut its key rates by 0.25% at the forthcoming mid-quarter review given the present need to boost growth.
"Growth has fallen and with inflation continuing to be flat, I expect the RBI to cut rates by 25 bps," Central Bank of India chairman and managing Director M V Tanksale told reporters on the sidelines of the Skoch summit in Mumbai.
Andhra Bank also expects a similar reduction in the policy rate, Chairman and Managing Director B A Prabhakar said.
On if the bank will pass on the benefit in the case the RBI cuts rates to borrowers, Tanksale said the bank will first wait for a reduction in deposit rates which can bring down the cost of funds, before taking a call on the issue.
Terming State Bank of India's decision to lower interest rates on select deposits by up to 0.25% as a "good move", he said his bank will take a call on it after June 18, when the RBI will be reviewing its monetary policy.
Tanksale, however, conceded that deposit mobilisation continues to be a challenge in the present times.
Prabhakar said his bank may tweak its deposit rates, especially those in the short-term baskets and the one-year maturity bucket, but did not give a timeline.
Reserve Bank Deputy Governor Subir Gokarn, who heads the monetary policy department, has already hinted at a reduction in the key repo rate, due to the falling growth and crude prices.
© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
Bankers said on Friday they expect the Reserve Bank to cut its key rates by 0.25% at the forthcoming mid-quarter review given the present need to boost growth.