Ease lending rates

Reserve Bank of India governor Raghuram Rajan’s reduction of the repo rate by 25 basis points, instead of the 50 points the market expected, is a welcome step. The markets and banks should know that the reduction brings the repo rate to a five-year low of 6.50 per cent. Instead of urging the RBI to cut rates further, banks should now pass on this benefit to consumers by lending at lower rates. With interests on small savings already reduced, one wonders what the banks are waiting for.

Angshuman Patnaik Via email