Dr Rajan is addressing the media on RBI’s policy stance. Here are the highlights of what the RBI chief said.
– New marginal cost-based lending rate to help lower rates for borrowers
– Policy stance to remain accommodative
– The focus is now on transmission of RBI rate cuts
– Have cut rates by 150 bps since the easing cycle began
– Happy with the progress on cleaning up of bad assets
– Monsoon, inflation and transmission of rates will determine future monetary policy stance
– RBI to release guidelines for on-tap licensing for banks
– Expect borrowing rate to get cheaper
– Borrowing will continue to be cheaper
– To look for room from good monsoon
– Impact of pay panel hike will be much less
– During election time cash increases in the system, not just in the election states but also in neighbouring states
– It’s Rs 50,000 crore to Rs 60,000 crore more than we estimated for this time of the year
– Deposit growth is lower than credit growth
– Seeing reasonable deposit growth at 9-9.5 per cent reasonable
– Expect consumer price inflation at 5 per cent by March 2017
– Important to investigate mistakes in lending
– Cyber security is an imp risk
– Rural inflation higher than urban and demand is still very muted
– Rate cut in line with policy direction
