ibnlive » Business

Mar 19, 2013 at 09:11am IST

RBI credit policy today, bankers expect rate cut

Mumbai: The Reserve Bank of India's (RBI) credit policy will be announced on Tuesday with bankers wanting the central bank to cut repo rates which could make home and car loans cheaper.

The repo rate is the rate at which banks borrow from the reserve bank when they are in need and at the moment banks are borrowing huge sums of money from the RBI. But even if the RBI were to cut the rate at which it is lending to banks it is unlikely that banks will cut the EMI or lending rates.

This is because as the financial year comes to an end, the banks normally are in need of deposits so that they cant bring down the deposit rate and unless they bring down the deposit rate they can't bring down the lending rate. Chances are that if the RBI signals lower rates, then it is possible that deposit rates will fall by second week April.