Reserve Bank of India has not made any change in the repo rate from February 2023. There has been no cut in interest rates since May 2000. The inflation rate has gone above the tolerance level of RBI i.e. more than 6 percent. In such a situation, will RBI cut the MPC repo rate in the month of December? The answer to this question is quite simple and it is no. On the other hand, the country’s Finance Minister expressed concern over high interest rates during a program.
He said that banks should not only think about reducing them, but should also take steps to reduce them. Now the biggest question is whether RBI, the regulator of the country’s banks, will take any decision regarding reduction in interest rates in the month of December? The question is very difficult. Amid rising inflation, this statement of the country’s Finance Minister has become a big challenge for the RBI. Let us also tell you what he has said?
Need to reduce loan rates
Union Finance Minister Nirmala Sitharaman said on Monday that bank interest rates are extremely stressful for some people, and steps need to be taken to make them cheaper. Amid widespread concerns about the possibility of a slowdown in economic growth, the Finance Minister assured that the government is fully aware of the domestic and global challenges. He said that there is no need to worry unnecessarily. Sitharaman said the important thing is that when you look at India’s growth needs, and the view from many quarters is that the cost of borrowing is actually going to be extremely high.
Banks focus here
At a time when we want industries to grow rapidly and capacity to build, bank interest rates should be much cheaper. At the annual business and economic conference of State Bank of India (SBI), he asked banks to focus on their core work of giving loans. The Finance Minister said that mis-selling of insurance products also indirectly increases the cost of borrowing for an individual or institution.
Is there any signal for RBI?
The Finance Minister of the country saying that banks need to reduce interest rates is not a signal for RBI. RBI’s MPC is going to be held in the month of December. However, many experts have denied that RBI will make any change in interest rates in the month of December. However, in the month of October, the RBI Governor had changed the stance of RBI and had said that interest rates may be cut sometime in the coming days. But the inflation figures for the month of October have once again made RBI think. In October, the retail inflation figure had reached above 6.20 percent.
