Lower rates to cushion note ban, says BoFAML report

NEW DELHI: Banks are expected to bring down lending rates by 50-75 basis points in April-September if the Reserve Bank injects liquidity worth ₹2.2 lakh crore through open market operations, Bank of America Merrill Lynch (BofA-ML) has said in a report. An open market operation refers to sale or purchase of government securities by RBI to adjust rupee liquidity conditions on a durable basis. “After normalisation, we estimate the durable accretion to bank deposits at about ₹2 lakh crore,” the report said. PTI