Banks may Cut Rates in Next Few Days: Shaktikanta Das
Country is moving towards a low interest rate regime: Eco affairs secy
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.