RBI rate cut will improve market sentiments: Indian Bank CEO

Public sector Indian Bank managing director and CEO Padmaja Chunduru on Friday said the rate cut announced by the Reserve Bank of India (RBI) would boost market sentiments. Commenting on the RBI monetary policy, Chunduru said the cut in the policy rate by 25 basis points was on expected lines and both the fiscal and monetary policies of the central bank were moving in tandem to spur growth in the economy.

"We believe the transmission of monetary policy rate changes will be faster now that banks have already introduced repo-linked retail and MSME products and rate cuts will be passed on to these borrowers," she said in a statement. "With the busy festive season having started, this rate cut will boost market sentiments," she said.

The main challenge was to revive consumption-led recovery and spur private investments post-tax corporate rate cuts, she said. Chairman and managing director, House of Hiranandani, Surendra Hiranandani said the move would make people take up purchases during the Dussehra and Deepavali festivals.

"The real estate sector has been looking forward to such initiatives to boost sales as it is highly sensitive to interest rate movements," he said in a statement. Further reduction in repo rate would not only bring down the lending rates but also incentivise investment and boost consumption, he said.

"Overall, it is not only the festive spirit, but also the market momentum that is poised to be in favour of the home-buyers," he said. Home, auto and other loans were set to become cheaper after Reserve Bank earlier in the day decided to cut the interest rates by 25 bps for a record fifth straight time to almost a decade low as it moved aggressively to revive economic growth..

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