Soon after the Reserve Bank unveiled its mid-quarter review of the monetary policy, several bankers hinted that they may consider rate cut in their ALCO (Asset Liability Committee) meeting.
RBI Governor D Subbarao in the third quarter monetary policy review surprised the market by cutting short-term lending rate called repo by 0.25 per cent to 7.75 per cent and Cash Reserve Ratio (CRR) by similar margin to 4 per cent, releasing Rs 18,000 crore primary liquidity into the system.
Commenting on RBI's action, SBI Managing Director A Krishna Kumar said "a rate cut is likely. Rates on advances and deposits could come down simultaneously. The RBI's action is positive".
Indian Overseas Bank executive director A K Bansal said the RBI's action will result in moderation of interest rates in the coming days.
Both lending and deposit rates are expected to see a downward revision which will improve growth prospects, he said.
According to Canara Bank executive director A K Gupta, the bank would consider interest rate cut in the light of RBI policy action. (MORE)
