A season of easing of rates has been signaled by the Reserve Bank of India with 25 basis point cut repo rate on Thursday.

Top lenders led by SBI and ICICI spoke of lowering of lending and deposit rates by the banks. SBI Chairperson Arundhati Bhattacharya said it was very difficult to talk about the timing of reduction in interest rate by her bank as of now, but "We can expect cutting lending rates in the coming days".

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Welcoming the RBI decision, Bhattacharya said, "We believe that this cut may be just the beginning of a rate easing cycle."

"Definitely, I think those cuts will happen that we have been talking for a while for easing of the rate cycle," ICICI Bank CEO Chanda Kochhar said when asked whether the lending and deposit rates would come down now.

#Ratecut is positive for Indian economy & will certainly help in reviving investment cycle the government is trying to restore:@arunjaitley

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Kochhar said that the decision by banks to lower the rates would be taken by their Asset-Liability Committees after looking into their own cost of funds, but that the direction was clearly towards reduction in the interest rates.
"In the deposit rates, we had already started factoring from as early as October as all indicators were forward looking indicators and were indicating that inflationary expectations were coming down sharply.

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"I think that has probably played out the way we had envisaged that it would, and the way forward would be reviewing of rate cycle," she said.

However, the banks refrained from giving any specific timeline for such rate cuts but the United Bank of India has already begun the season of rate cuts by reducing its base rate by 0.25% to 10%. The lending rate cut is effective from February 1.

#RBI rate cut will help #Reality and #Power sectors.

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