Less than a week after Indian GDP figures illustrated a reduced growth rate 5.3%, the Reserve Bank of India (RBI) has announced as predicted in our earlier post last week ,to lower the cost of lending deposit rates by trimming the repo rate and the reverse repo rate by 50 basis points each. (more…)

There is a growing expectancy that the Reserve Bank of India (RBI) will cut interest rates in India further in the coming weeks. (more…)

The Reserve Bank of India (RBI) left its key interest rates unchanged today according to Reuters.

The RBI said that Indian banks still had to pass on the benefits of earlier cuts and urged them to do so. However most financial and economic commentators expect that the RBI to announce another interest rate reduction in the coming months. (more…)

Housing Development and Finance Corporation (HDFC), India’s biggest housing sector lender, has cut its housing loan rates by 50 basis points (bps) following a deposit rate cut by 50-75 bps yesterday. HDFC will now disburse floating rate home loans for property in India up to Rs 30 lakh at 9.75 per cent and loans above Rs 30 lakh for property in India at 10.75 per cent to new borrowers. (more…)

India could cut interest rates by another 150 basis points by mid-2009 as authorities fight to prop up sagging growth, but the central bank is unlikely to seek zero rates like the United States and Japan even as deflation rears its head according to The Economic Times.

The Reserve Bank of India cut interest rates on Friday for the fourth time since the global financial crisis blew up in September, taking the total reduction in its key lending rate or the repo rate to 350 points. It now stands at 5.50 percent.

Other central banks have slashed rates heavily too to fight off the deepest global financial crisis in decades. The US Federal Reserve and Japan have cut their rates close to zero, sparking debate on how far central banks will have to go to revive their economies.

In India, Ila Patnaik, senior fellow at the National Institute of Public Finance and Policy, a think tank, advocates that the Reserve Bank of India (RBI) follows the Federal Reserve and the Bank of Japan. Other analysts are much more cautious, suggesting more modest cuts. Macquarie Research has pencilled in cuts of 100-200 basis points, HSBC 50 basis points and JPMorgan 150 basis points. Limited government spending power puts the emphasis on the central bank to boost the economy but with growth this year still likely to be the envy of any developed nation, such aggressive cuts aren’t warranted, they say.

The country’s largest private lender, ICICI Bank, Wednesday slashed its floating home loan rate and benchmark lending rate by 50 basis points each.

Floating Reference Rate for home loan has been cut by 0.5 per cent with effect from December 31, ICICI Bank said in a statement.

The rate, which has been reduced from 14.25 per cent, will benefit all existing home loan and auto loan customers, the bank said.

Besides, the bank also reduced it benchmark lending rate by half a percentage points to 16.75 per cent.

With the reduction, the benchmark Advance Rate (I-BAR) will be 16.75 per cent against 17.25 per cent at present.