The Reserve Bank of India cut its repo rate by 25 basis points to 6.50 per cent at a policy review on Tuesday, making a widely expected first reduction since over six months to bring the rate to its lowest in more than five years.


Reserve Bank Governor Raghuram Rajan addressing the media on RBI's policy stance raised hopes of those with home loans saying he would ensure the benefit being passed on to banks would be passed on to customers as well. Highlights...

- Will ensure borrowers get rate cut benefits.
- 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
- 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
-- Seeing reasonable deposit growth at 9-9.5 per cent.
- 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.
- Borrowing is now significantly cheaper.