The RBI’s decision to reduce repo rate by 25 basis points in its monetary policy for 2013-14 indicates the central bank’s signal for promoting growth, according to Corporation Bank Chairman and Managing Director, Ajai Kumar.
Ajai Kumar told Business Line that the reduction in repo rate indicates RBI’s signal for promoting growth in an otherwise inflationary scenario, leaving little space for further rate cuts.
He said that the call on reduction in base rate for lending may be taken over a period of time, and it would depend upon how the deposit rates move.
“In the present scenario, where deposit mobilisation is still not picking up, it would be too early to comment on lending rate cut,” he said.