Rate Cut: Will the banks follow RBI's rate cut this time around?

The Union Budget and the Economic Survey of last week did outline the need for easing of the monetary policy from the RBI's stable.

File Photo dna Research & Archives

This is the second time in as many months that Raghuram Rajan, Governor, Reserve Bank of India (RBI) has surprised the markets by cutting repo rates ahead of themonetary policy schedule. 
The repo rate in the beginning of the year was 8% and after the two cuts, stands at 7.5%. Seen as an important measure to kick-start growth so that banks can lend again to the industry, the repo rate cut is a significant measure to improve liquidity in the banking sector. 

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