BENGALURU: The Reserve Bank of India decided to keep the key rates—Repo Rate and the Cash Reserve Ratio unchanged in its bi-monthly monetary policy. Ind Inc was expecting further rate cuts in the coming months. And the Statutory Liquidity Ratio (SLR) was cut by 50 basis points (BP). SLR is the reserve requirement the bankers have to maintain with the central bank in the form of gold, cash or government bonds before crediting to the customers.

Following that, bankers sanguine on cut in the repo rates citing the favorable conditions in the country with relatively lower and sustained Consumer Price Index and Wholesale Price Index. Repo rate is the rate at which the RBI lends to the bankers and corporate. This rate remains unchanged at 7.75 percent in the bi-monthly review. These high interest rates make it difficult for the CEOs to borrow loans from the bankers.

Also on the other hand the global oil prices have been falling down, which gives a great opportunity to the investors to accelerate their industrial investments. CEOs and CFOs are of the opinion that this is the right time for the RBI to further cut the interest rates and facilitate more investments. However the RBI justified its status quo on the unchanged interest rates saying that the banks can utilize the slash in the SLR to support investment and growth.

Also Read: Bank, Realty Stocks Plunge As RBI Keeps Rate Unchanged

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