Banks may Cut Rates in Next Few Days: Shak­tikanta Das

Coun­try is mov­ing to­wards a low in­ter­est rate regime: Eco af­fairs secy

The Economic Times - - Economy - Our Bu­reau

New Delhi: The fi­nance min­istry on Fri­day said In­dia is mov­ing to­wards a low in­ter­est rate regime and banks are ex­pected to cut in­ter­est rates over the next few days in view of the re­cent mone­tary eas­ing by the Re­serve Bank of In­dia. “Banks are au­ton­o­mous and the gov­ern­ment has given very strong sig­nal by main­tain­ing the fis­cal deficit at 3.5% and re­set­ting small sav­ings rates. RBI has re­duced the pol­icy rate by 25 ba­sis points. One would ex­pect banks to take a pol­icy call and I am sure they would do it in days and weeks to come,” eco­nomic af­fairs sec­re­tary Shak­tikanta Das said at a func­tion. Das said the gov­ern­ment ex­pects banks to do a more ef­fec­tive trans­mis­sion of rates.

“I do ex­pect banks to take steps in that di­rec­tion,” he said at Growth Net con­fer­ence, adding that In­dia is mov­ing to­wards a low in­ter­est rate regime as in­fla­tion is un­der con­trol. “We are look­ing at a regime of low in­ter­est rates, thanks to in­fla­tion be­ing un­der con­trol and var­i­ous mea­sures which the gov­ern­ment has taken. The fi­nance min­is­ter

FILE PHOTO has given a very strong mes­sage that In­dia should move to a low in­ter­est regime by stick­ing to the fis­cal deficit of 3.5%,” he said.

RBI, in its first bi-monthly pol­icy re­view of the cur­rent fis­cal on April 5, cut in­ter­est rate by 25 ba­sis points and took a range of mea­sures to en­hance liq­uid­ity. RBI had cut repo rate, the key pol­icy rate, to 6.5%, the low­est in the past five years.

One ba­sis point is one hun­dredth of a per­cent.

Das­saidthe­gov­ern­men­tis­work­ing on the pub­lic util­ity dis­pute res­o­lu­tion bill. The gov­ern­ment is look­ing to in­tro­duce a bill for dis­pute res­o­lu­tion in PPP projects, pro­posed in the 2017-17 bud­get, in or­der to stream­line in­sti­tu­tional ar­range­ments for res­o­lu­tion of dis­putes in in­fra­struc­ture re­lated con­struc­tion con­tracts, PPP and pub­lic util­ity con­tracts.

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