Money & Banking
RBI's 50 bps rate cut can be effective: CEO survey
New Delhi : While 25 basis points (bps) cut in the interest rates by the RBI in the monetary policy is imminent, the real impact on lending costs will be felt if the apex bank goes for at least a 50 bps cut, says a CEO survey conducted by Assocham ahead of the monetary policy review on April 5.
 
"The RBI has all the building blocks in place to go in for re-aligning the repo rate to 6.25 percent on April 5 when it reviews the credit policy," Associated Chambers of Commerce and Industry of India (Assocham) said. 
 
The repo rate currently stands at 6.75 bps.
 
As many as 82 percent of the 110 CEOs across different sectors surveyed by Assocham said that a rate cut of 25 bps would be only a ‘baby step’ and would not create impact adequate enough to trigger a big positive business sentiment.
 
"The retail inflation at 5.18 percent is well below the RBI target while the government has delivered in terms of financial discipline," a majority of the CEOs said in the survey.
 
For the 2015-16 fiscal, the finance ministry on Friday said it had contained fiscal deficit at 3.9 percent of the GDP and targets it at 3.5 percent of the GDP during 2016-17. 
 
The government has also taken a bold decision to lower interest rates on the small savings and the Employees Provident Fund (EPF) contributions so that the banks can operate on a level-playing field, the survey said. 
 
Though the Reserve Bank of India (RBI) slashed the benchmark rate by 125 bps last year, the transmission by the banks was much lower. As many as 68 percent of the CEOs in the survey said the banks could have done more by way of rate transmission. 
 
With introduction of the new Marginal Cost of Funds based lending rate (MCLR), the transmission of rate is being effected at least to the extent of 10 basis points. 
 
With expectations of normal monsoon rains, the revival in agricultural production will bring about a further uptick in the economic environment, it said. 
 
Over and above the repo rate, the survey said that industry leaders want the RBI to infuse more liquidity by way of easing the cash reserve ratio by 50 bps, which again will lead to easing of the lending rates. 
 
In the policy review on April 5, the RBI is also expected to come out with further measures to deal with the non-performing assets (NPAs).
 
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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RBI likely to cut interest rate by mininum quarter percent
Mumbai : At the new fiscal's first bi-monthly monetary policy review due on Tuesday, RBI Governor Raghuram Rajan is widely expected to cut interest rates by at least a quarter of a percentage point on the back of the union budget's fiscal prudence measures, reduction in small savings interest rates and low inflation.
 
"Though a 25 basis points (bps) rate cut is anticipated by market participants, and few even expect a possibility of a surprise 50 BPS cut as well, thereby setting the tone for the new financial year," Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.
 
At its sixth and the fiscal's final bi-monthly monetary policy review in February, Reserve Bank of India (RBI) kept its key lending rate unchanged at 6.75 percent.
 
"The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on inflation," Rajan said in his policy statement at the time.
 
The government has cut the small savings interest rate by up to 1.3 percent, facilitating an RBI rate cut.
 
India's annual retail inflation eased to 5.18 percent in February from 5.69 percent in the month before even as the 12-month wholesale inflation was in the negative for the 16th straight month, official data showed last month.
 
Rajan, last month, kept the cards close to his chest on possible easing of monetary policy with rate cuts, but said the government's decision to stick to its fiscal targets was comforting.
 
He also said economic recovery in the country was not smooth, particularly after data on index of industrial production (IIP), released by the Central Statistics Office last month, showed India's factory output had logged a decline in January for the third straight month.
 
Bansi Madhavani, analyst, India Ratings and Research, told IANS that a cautious assessment of US economic revival prospects in the FOMC (federal open market committee) minutes may push back expectations of a near-term rate hike.
 
While 25 basis points cut in the interest rates by the RBI in the monetary policy is imminent, the real impact on lending costs will be felt if the apex bank goes for at least a 50 bps cut, says a CEO survey conducted by Assocham ahead of the monetary policy review.
 
"The RBI has all the building blocks in place to go in for re-aligning the repo rate to 6.25 percent on April 5 when it reviews the credit policy," Associated Chambers of Commerce and Industry of India (Assocham) said in a statement.
 
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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Scientists develop green technology for water purification
Kolkata : Indian scientists have developed an eco-friendly nanotechnology for water-softening applications that could be used in civic water treatment plants for generating potable water, said the official of a technical institute.
 
The team from Institute of Advance Study in Science & Technology (IASST) in Assam's Guwahati, crafted a biopolymer using a naturally occurring substance, called chitosan (obtained from the hard outer skeleton of shellfish, including crab, lobster, and shrimp) as a backbone for the carbon nanoparticles to sit on.
 
"In the biopolymer, nanoparticles are the functional parts of the technology. They remove calcium and magnesium components of water through ion exchange, the same process that is used by common water purifiers," Devasish Chowdhury, associate professor, physical sciences division, IASST, told IANS.
 
"This material, we report, is the first of its kind with potential to act as a biodegradable and green material for water-softening applications," he said.
 
Published online on March 30 in the joural Nanoscale, the work involved IASST's Upama Baruah and Achyut Konwar.
 
While convention water-softening techniques use synthetic resins, Chowdhury said that the novel technology is biodegradable as well.
 
"We have applied it to pond water sample successfully. This could be used in civic water treatment plants since they do not have very effective water-softening methods and the resulting treated water is very crude," he added.
 
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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