Advertisement
Monday, Oct 25, 2021
Outlook.com

Matters Of Interest

The RBI's signalling a lower-interest regime is as well-timed as it is welcome

Matters Of Interest
Matters Of Interest
outlookindia.com
-0001-11-30T00:00:00+05:53

For the first time after 1992, bank stocks have joined the stock-market rally, gaining handsomely on expectations of a profit boost through the bank rate cut. In a synchronised sequel to Budget 1999-2000, the RBI cut the bank rate by a percentage point to 8 per cent and repo rate by a sharp two points a day after the budget. To top what now seems a coherent package to boost capital markets and buoy investment sentiment, the central bank also dropped banks’ cash reserve ratios (CRR) from 11 to 10.5 per cent.

The stage is now set for an across-the-board cut in interest rates to put more cash in the hands of enterprising businessmen. The cut in CRR alone will release Rs 3,500 crore into the system. Says State Bank of India (SBI) chairman G.G. Vaidya: "Already, there have been signs of credit picking up. I am sure the credit offtake will grow manifold in the last month of the current fiscal and the first quarter of 1999-2000."

Justifying the cuts, RBI governor Bimal Jalan said: "Some months ago, I had already indicated preference,...

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

'Phir Bhi Dil Hai Hindustani': Shah Rukh Khan As The Symbol Of Indianness

'Phir Bhi Dil Hai Hindustani': Shah Rukh Khan As The Symbol Of Indianness

SRK’s persona evokes the kind of Indianness that denies categorisation into singular, exclusive identities. And thrives on making others feel welcome.

Aryan Khan Case: Witness Alleges NCB Asked For Rs 18 Crore Bribe From Shah Rukh Khan

Aryan Khan Case: Witness Alleges NCB Asked For Rs 18 Crore Bribe From Shah Rukh Khan

Aryan Khan, who is currently lodged in Mumbai's Arthur Road Jail, was arrested on October 2 on a cruise in connection to the possession of illegal drugs.

T20 World Cup: Pakistan Break Jinx Vs India In Style

T20 World Cup: Pakistan Break Jinx Vs India In Style

Babar Azam (68) and Mohammad Rizwan (79) made light of a 152-run target to help Pakistan break a World Cup jinx against India.

Love, Longing And Shah Rukh: Growing Up With DDLJ In The Time Of Mandal And Kamandal

Love, Longing And Shah Rukh: Growing Up With DDLJ In The Time Of Mandal And Kamandal

Shah Rukh Khan called himself a peddler of love. That’s better than the pitches selling religion. Love is all we need now.

Advertisement