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It cut the repo rate, at which it lends cash to banks, to 5.5 per cent from 6.5 per cent.
The reverse repo rate, the rate at which the RBI absorbs excess cash from the system, was cut to to 4.0 per cent from 5.0 per cent.
Both reductions are effective immediately.
The repo rate has been cut aggressively since mid-October last year as the central bank tried to minimise the knock-on effects of the global financial crisis.
The central bank also announced a cut in cash reserve ratio, the proportion of deposits banks must keep with the central bank, by 50 basis points to 5.0 per cent with effect from Jan. 17.
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these interest cuts surprsingly do not refelct in our MTLs and WC Limits!! It should be compulsory for banks to do credit ratings of their clients, and the mother bank should decided exact interest chargeable to clients on rating basis. this will make it more transparent and equal. Taking it higher maybe a standard software can be designed to run to decide the clients credit rating automatically and apply applicable interest....MAKE USE OF TECHNOLOGY INSTEAD OF MAKING EXCUSES FOR LACK OF MANPOWER BANKERS!!!
ICICI must be making huge profits from home loan division. RBI's Repo, Reverse Repo and CRR are slashed considerably since October. ICICI had not reduced rates so far for existing borrowers. They did, just 50 basis point cut on 31st. At same levels of Repo, RevRepo and CRR, out home loan rates used to be around 8 pc. Will ICICI make it 8PC now? Even if they do, it will be applicable only effective second quarter i.e. april 01 2009. Hefty profits for ICICI