Reserve Bank drops rates; cascading effect expected shortly
Mumbai: In what is described a strong endorsement for growth, but actually helping a debt-ridden government borrow more at a cheaper rate, the Reserve Bank of India today announced the cut in bank rates and the CRR by one percentage point each.

The cascading effect this could have on the lending and deposit rates is expected to happen on April 3, when the banks open after a weekend. The bank rates have been slashed from 8 to 7 per cent, the savings account rates from 4.5 to 4 per cent and the CRR from 9 to 8 per cent.

Money market dealers, however, have been expecting this cut for sometime now, since the inflation rate has been very low over the past year.
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