Hailing the RBI’s decision to cut lending rate by 0.25 per cent as a welcome step to boost demand and revive economy, industry chambers on Thursday said there is more room to slash rates further. The Reserve Bank of India (RBI) cut the repo -- short term lending rate at which it gives loan to banks -- third time in a row to 5.75 per cent in its second bi-monthly policy decision, adopting an accommodative stance. “There is room for further rate cut.
This third consecutive rate cut in repo rate will lead to effective transmission, encouraging banks to lower their lending rates for both retail and corporate credit,” said Sandip Somany, President, Ficci. Taking cues from the global factors as well as recent Government data that estimated India’s GDP growth to a five-year low of 6.8 per cent in 2018-19, the RBI has also revised downward the economic expansion to 7 per cent from 7.2 per cent earlier for the current fiscal. Reviving business confidence, consumer confidence and triggering animal spirits in the economy is the need of the hour, the chamber said in a statement.