Economy
Passing RBI rate cut to borrowers may take 1 or 2 quarters: Official
Passing the Reserve Bank of India's 50 basis point rate cut by commercial banks to their borrowers may take around one or two quarters, a top official of City Union Bank said on Tuesday.
 
"The direction and the quantum of rate reduction are clear. What remains is the timing for the banks to pass on the rate cut to their borrowers," N. Kamakodi, managing director and CEO of City Union Bank, told IANS.
 
He said reduction in bank interest rates on deposits will also take one-three months.
 
Kamakodi dubbed the RBI's cut on short-term lending rate to banks by 50 basis points as a "pleasant surprise" as the industry was expecting cut of only around 25 basis points.
 
According to Kamakodi, the bank's lending rate was determined by demand and supply.
 
"The growth of deposits has overtaken credit growth now. Some banks have already reduced their lending rates by quarter to half percent, based on the earlier rate cuts by the RBI," Kamakodi said.
 
RBI Governor Raghuram Rajan, in his fourth bi-monthly monetary policy statement for the current fiscal, said the markets/banks have passed on the earlier rate cuts only to a limited extent.
 
"Median base lending rates of banks have fallen by only about 30 basis points, despite extremely easy liquidity conditions," the governor said.
 
"It is a fraction of the 75 basis points of the policy rate reduction during January-June, even after the passage of eight months, since the first rate reduction by the Reserve Bank. Bank deposit rates have, however, been reduced significantly, suggesting further transmission is possible."
 
Kamakodi said the RBI has till date cut the policy rate by 1.25 percent and some banks have already cut their lending rates.
 
He said there will not be much of a difference between public and private banks in their lending rate reductions but the timing of the reduction may vary.
 
Kamakodi said the banking sector is expected to log a credit growth of around 10-13 percent this fiscal.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Made in China goods bad for environment: Study
Products made in China may cost you less but they are associated with significantly higher carbon dioxide (CO2) emissions than the same products made elsewhere, claims new research.
 
"The amazing increase in Chinese manufacturing over the past 15 years has driven the world economy to new heights and supplied consumers in developed countries with tremendous quantities of lower-cost goods," said study co-author Steven Davis, assistant professor of Earth system science at University of California, Irvine, US. 
 
"But all of this has come at substantial cost to the environment," Davis noted.
 
The researchers attributed China's high emissions intensity - the quantity of CO2 emitted per dollar of goods produced - to the nation's antiquated manufacturing processes and reliance on coal.
 
"The CO2 emissions related to China's exports are large not just because they export a lot of stuff or because they specialise in energy-demanding industries, but because their manufacturing technologies are less advanced and they rely primarily on coal for energy," study co-author Klaus Hubacek, professor of geographical science at University of Maryland said.
 
The findings suggest that consumption of Chinese-made goods by consumers in advanced economies is potentially accelerating global climate change, a problem without national borders.
 
For this study, researchers paid particular attention to Chinese regions with high emissions intensity. 
 
They found that steel mills, mineral processors and petrochemical plants in Guizhou, Inner Mongolia, Ningxia, Yunnan and Shanxi are among China's dirtiest industries. 
 
Davis and his colleagues suggest that developed countries could do a lot to alleviate carbon pollution by helping improve manufacturing processes in these areas.
 
"This analysis can help policymakers in China and internationally identify the industries and provinces in which efforts to promote less energy-intensive manufacturing equipment and practices would have the largest leverage to reduce CO2 emissions," study lead author Zhu Liu, research associate at Harvard University, pointed out.
 
"Given the differences we observed within industries and across provinces in China, many opportunities would involve creating incentives to promote the adoption of Chinese best practices," Liu said.
 
The study was published in the journal Nature Climate Change.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Indian market trends

The Sensex and the Nifty rose 1% each, along with ML Large-cap Index, for the fortnight ended 23rd September. ML Mega-cap Index fell 1%. ML Micro-cap Index and ML Mid-cap Index advanced 4% each.

 

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