RBI’s CRR cut expected to make home loans cheaper
Reserve Bank of India has announced a cut in the cash reserve ratio (CRR) by a quarter of a percentage point (25 basis points) to 4.5% in its policy review meeting.
With the announcement, home and auto loans will gradually become cheaper over the next few months. However, the RBI disappointed industry by leaving repo and reverse repo rates unchanged.
Interest rates are expected to come down faster once the inflation rate goes down, which will benefit consumers, home and car buyers as well as corporate entities.
It is expected that the cut in CRR would release around Rs 17,000 crore into the economy, implying banks will have the extra money to lend to their borrowers.
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