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Feb 07, 2019 09:27 PM IST | Source: Moneycontrol.com

RBI Policy meet highlights: Policy rightfully signals rates may further soften further, says SBI Chairman

RBI Governor Shaktikanta Das promises to cut repo rate if inflation is below 4 percent.

  • Feb 07, 08:19 PM (IST)

    The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has cut the repo rate by 25 bps, and currently stands at 6.25 percent. Tune in to the podcast below to see which stocks and sectors can benefit from the rate cut:

  • Feb 07, 07:30 PM (IST)

    "This is great news for borrowers, especially those who are planning to invest in real estate. With the budget scrapping tax from notional rent on second self-occupied property and enabling the capital gains to be invested in two houses instead of one, the interest in the real estate has already gone up. This additional rate cut will further sweeten the deal. A 25 bps rate cut on a 20-year home loan of Rs.40L at 8.85 percent will bring down the interest payable from Rs.45.4L to Rs.43.9L at 8.6 percent. That is a savings of Rs.1.5L over the tenor of the loan." - Adhil Shetty, CEO, BankBazaar.

  • Feb 07, 07:17 PM (IST)

    “The RBI has clearly focused on driving growth with the change in stance to neutral and the 25 bps rate reduction. This will help boost credit flow and also drive consumption. With the downward revision in inflation forecasts, it will be interesting to see the stance and rate decisions in the subsequent monetary policies. The statement on developmental and regulatory policies also reflects growth orientation. The highlight being the enhancement of the limit of collateral-free agriculture loan to Rs.1.60 lakh will bring more farmers within the formal credit system.”Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank. 

  • Feb 07, 05:49 PM (IST)

    "There are several innovative announcements in policy apart from a rate cut that could potentially trigger a new paradigm for financial markets. The decision to rationalise the risk weights for on lending to rated NBFCs will enable better price discovery, lower capital requirement and facilitate credit flow from the banks. Opening up the ECB route for applicants under the IBC could facilitate a faster turnaround. The proposal to rationalise interest rate derivative regulations will provide the desired boost to the ultimate goal of developing a dynamic environment for management of interest rate risk. Decision to withdraw the provision of stipulations for FPI exposure to corporate bonds to a single corporate will incentivize the investors. Raising the limit for collateral-free agri loan to agriculture loans from Rs 1 lakh to Rs 1.6 lakh will result in enhanced coverage of small and marginal farmers. Further, the policy rightfully signals that rates may further soften further going forward, with headline inflation consistently undershooting RBI inflation mandate and inflation expectations materially down." -Rajnish Kumar, Chairman, SBI.

  • Feb 07, 05:38 PM (IST)

    “The RBI has delivered a timely 25 basis points repo rate cut and also softened its monetary stance to neutral, on the back of consistently low inflation and slowing global economic growth. The RBI has been supplying liquidity through sustained Open Market Operations (OMOs) of government securities and with this rate cut, we should see a moderation in borrowing rates. Providing banks with increased flexibility on bulk deposits is a welcome move and will assist them in better managing their asset liability mismatches.” Zarin Daruwala, CEO, India, Standard Chartered Bank.

  • Feb 07, 04:15 PM (IST)

    "As inflation eased to approximately 2 percent from November to December in 2018, it was only a matter of time before rates were cut. We hope that the rate cut will be transmitted by the financial sector to the real economy, so that the economic activity could achieve the benefits and private consumption/investments may also grow faster. If oil prices remain subdued and inflation remains below the RBI’s mandate of 4 percent, another rate cut in April cannot be ruled out. The market will take It very positively." -Motilal Oswal, Chairman & MD, MOFSL.

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