Today, during the first Bi-monthly Monetary Policy Statement for 2016 -17, RBI Governor Dr. Raghuram Rajan announced a 25 basis point cut in the policy repo rate bringing it down to 6.50%. Dr. Rajan emphasized that the intention behind rate cut is to pass the benefits to borrowing rates.
In the news conference following policy review Governor Raghuram Rajan expressed his disappointment over the benefits of last years policy rate cuts not being passed over to borrowers as he had expected. Governor voiced his confidence that banks would take heed this time and they will ease lending rates.
Speaking about banking regulations, RBI Governor has informed that RBI would be rationalizing the Branch Authorization policy. The current policy approach lays more emphasis on adequate outreach of banking outlets to unbanked areas while at the same time giving autonomy to banks to decide their business strategy.
RBI Governor also informed that it will publish Vision 2018 for revamping payment and settlement systems in the country. The Vision 2018 will be in a direction to move towards “less-cash” and more digital society.