Press Trust of India
New Delhi, April 8: Asserting that India is moving towards a low interest rate regime, Economic Affairs secretary Shaktikanta Das Friday said banks are expected to cut interest rates over the next few days in light of the recent monetary policy easing by RBI. “Banks are autonomous and the government has given very strong signal by maintaining the fiscal deficit at 3.5 per cent and resetting small savings rates. RBI has reduced the policy rate by 25 basis points. One would expect banks to take a policy call and I am sure they would do it in days and weeks to come,” he said on the sidelines of an event here.
The Reserve Bank, in its first bi-monthly policy review of the current fiscal on April 5, cut interest rate by 0.25 per cent and introduced a host of measures to smoothen liquidity supply to help banks lend more money to productive sectors and indicated an accommodative stance, going ahead. Banks are now also expected to do effective transmission of rates, he said, adding that part of it has already been done by adopting the Marginal Cost of Funds-based Lending Rate (MCLR) and reducing the rate of interest marginally. “We would expect the banks to do a more effective transmission of rates. I do expect banks to take steps in that direction,” he said. Das further said India is moving towards a low interest rate regime as inflation is under control.
Bankruptcy code in upcoming session
A Parliamentary panel is expected to submit its report on the Bankruptcy and Insolvency Code on April 29 and government would push for the passage of the bill in the second leg of the Budget session, Economic Affairs secretary Shaktikanta Das said. “The Parliamentary Committee is expected to submit its report on April 29 and it would be endeavour of the government to get the (Bankruptcy) Bill passed in the second leg of the Budget session,” he said. The Insolvency and Bankruptcy Code 2015, which will replace the existing bankruptcy laws, lays down a comprehensive law to deal with insolvency of corporates and simplify investors’ exit.
