Terming the RBI’s decision to cut CRR and repo by 25 bps each as a welcome move, Ajai Kumar, Chairman and Managing Director of Corporation Bank , said that the reduction in repo rate is going to support growth, which is experiencing deceleration.
He said that the reduction in CRR will enable banks to have lower cost of funds and result in moderation of lending interest rates which will spur investment climate and growth.
The central bank action may release around Rs 18,000-crore liquidity into the system.
Ajai Kumar said that these policy actions may prompt banks to pass on the benefits of rate cut to customers by reducing their lending rates.