Going by the expectations and rumours floating earlier, Reserve Bank of India has announced that it will not make any immediate changes in the repo rate. Repo rate is the rate of interest which RBI counts while lending short term money to the banks in the country. Along with the repo rate, CRR, cash reserve ratio was also kept unchanged at 4 percent.
Statutory Liquidity Ratio, widely known as SLR was cut down by 50 base points and the new rate stands at 20 percent. SLR is a defined percentage by RBI, which regulates that the banks need to spend a percentage of their deposits in specified financial securities, often owned by State and central governments.
These announcement were made by a committee of 6 members, headed by RBI governor Urjit Patel. Known as Monetary Policy Committee, it announced bi-monthly monetary policy after every 2 months. After this announcement, there seems to be no change in the interest rates for home loans, car loans and personal loans.