India: Reserve Bank cuts lending rate

By APD Writer Rishika Chauhan

**NEW DELHI, August 4 (APD) ** -- The Reserve Bank of India (RBI), recently cut its key lending rate, helping banks to reduce monthly installments on loans and lend more money to businesses. After the cut the rate is at a six-and-half-year low and stands at 6%.

The action is expected to release pressure from the government and markets and help in lifting the economy, which registered an annual growth of 6.1% in January-March.

The rate is still being considered encouraging when compared to other countries; however, it is India’s lowest growth rate in more than two years.

Speaking to the media Urjit Patel the governor of RBI said, “There is scope for banks to cut rates further, especially for those sectors which have not benefited in the past cuts.”

It is the first rate cut since October last year. The adverse impact of demonetization on the economy is also being said to be one of the reasons to take this step.

This week, State Bank of India, which is the largest lender in the country, reduced the interest rate on savings bank deposits.

(ASIA PACIFIC DAILY)