RBI consultation mulls change in 25 bps cut norm

RBI consultation mulls change in 25 bps cut norm
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Highlights

The RBI could soon start discussions to break away from the convention of reducing key policy rate by 25 basis points or multiples thereof shortly with stakeholders like lenders, domain experts and within the Central Bank.

New Delhi: The RBI could soon start discussions to break away from the convention of reducing key policy rate by 25 basis points or multiples thereof shortly with stakeholders like lenders, domain experts and within the Central Bank.

"There is a need to consider interest rate adjustments, not necessarily in the conventional way of 25 bps or multiples thereof. This idea needs further debate and discussion", earlier this month RBI Governor Shaktikanta Das had told the Monetary Policy Panel.

Sources said the apex bank would seek comments from banks on their views and reasons of holding that view with empirical evidence and from monetary policy experts and within the central bank itself but added that it's not something that would be done without scrutinising the global practice, consultations, debates and counter arguments.

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