Banks will lower base rate by 40-60 bps from April 1

The government has stuck to its end of the bargain and in Budget 2016 reiterated its commitment to meet the 3.5 percent fiscal deficit target in the new fiscal. It now expects the Reserve Bank to play ball and cut rates. Irrespective of this, banks are anyway expected to cut their base rates come April 1.

Government sources say banks are likely to lower base rate by 40-60 basis points from April 1, because that is when the banks will have to adhere to the new base rate math.

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