RBI to cut interest rates further: PNB

RBI to cut interest rates further: PNB
PTI
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First Published: Fri, Feb 13 2009. 02 59 PM IST
Updated: Fri, Feb 13 2009. 02 59 PM IST
New Delhi: “The Reserve Bank of India (RBI) would further cut down key policy rates with inflation continuing its downward trend,” Punjab National Bank (PNB) CMD K.C. Chakrabarty said.
“There is scope for further reduction by the RBI and even banks have room to lower their rate at a time when inflation is easing on week-on-week basis,” he said.
For the week ended 31 January inflation fell to over a 12-month low of 4.39%, raising expectations of further cuts in policy rates by the RBI.
He said: “RBI gives the signal, it’s only when the banks cut the rates, then it makes the real difference.”
The third quarterly review of monetary policy has observed that most banks have reduced interest rates to some extent, but there are some that are yet to do so.
Beginning this month PNB reduced its benchmark lending rate by 50 basis points to 11.5%.
The bank also reduced interest rates on home, education, car as well as personal loans by up to 50 basis points from 1 February.
RBI, since mid-September, has aggressively cut policy rates and reserve ratios, injecting over Rs4,00,000 crore funds into the system, signalling a soft interest rate regime since Lehman Brothers went for bankruptcy.
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First Published: Fri, Feb 13 2009. 02 59 PM IST