Mumbai,jan.15 : The Reserve Bank of India announced a 25 basis point cut in its benchmark interest rates a little over a fortnight ahead of its February 3 policy review.
The reduction in rates will accelerate the downward movement of deposit rates and will also translate into lower rates for borrowers. Some banks which have not revised their benchmark base rates in the last year are expected to do so now.
Following the rate cut RBI’s repo rate the rate at which it provides overnight funds to banks stands reduced to 7.75% from 8% earlier. The reverse repo rate stands adjusted to 6.75%, and the marginal standing facility (MSF) rate (an emergency funding window) and the Bank Rate are revised to 8.75% with immediate effect.