RBI MPC meeting updates: CRR cut to aid transmission, improve credit growth; IndusInd bank issue should settle down very soon, says Malhotra

RBI Monetary Policy Committee: The Reserve Bank of India on June 6 announced a surprise 50-bps rate cut in its bi-monthly monetary policy review to 5.5 percent. The rate-setting panel also provided a boost to liquidity with a 100 bps reduction in cash reserve ratio to 3 percent.

A poll of economists conducted by Moneycontrol had predicted a repo rate cut of 25 bps

RBI today's monetary policy communication was action packed - innovative, out of the box, says SBI chairman

CS Setty, Chairman at SBI and IBA:

“A 50-bps policy rate cut, a staggered 100 bps CRR cut and change of stance to neutral, RBI today's monetary policy communication was action packed - innovative, out of the box and an unanticipated surprise. The MPC has broadly addressed any concerns on slowdown in growth on account of global uncertainties and fully capitalized on the softening domestic inflation to deliver a frontloaded rate cut, staggered durable liquidity injection yet conserving the space for future action.

The policy is definitely positive for all sectors of the economy, particularly for banking and finance. In particular lower cost of borrowing will act as a counterbalance to any uncertainty.”