New Delhi: The Reserve Bank of India on Thursday slashed lowered its key lending rate for commercial banks by 25 basis points (bps) to 5.75 per cent, a move that may make home and other loans cheaper. This is the third repo cut by the Reserve Bank of India in the last six months.
In a relief for the common man, the RBI on Thursday brought down the repo rate to 5.75 per cent from 6 per cent.
The Reserve Bank of India’s monetary policy committee (MPC), led by governor Shaktikanta Das, announced the policy decision on Thursday amid slowing economic growth and global uncertainty.
Repo rate is the interest rate at which commercial banks borrow short-term funds from the RBI. The bank has also changed the monetary policy stance from “neutral” to “accommodative”.
The decision came after the conclusion of a three-day meeting of the MPC. This is the third repo cut by the Reserve Bank of India in the last six months. The lower repo, or short-term lending rate for commercial banks, will reduce the interest cost on automobile and home loans, to boost growth.
The Reserve Bank of India has been decided to set up a committee involving all stakeholders, under the chairmanship of CEO Indian Banks’ Association (IBA), to examine ATM charges and fees. The committee will have to submit its recommendations within two months of its first meeting, the news agency added.