The central government has welcomed the step taken by the Reserve Bank of India (RBI) to cut the repo rate by 50 basis points, reducing it overall by 125 basis points in the year 2015 (“RBI move could make your loans cheaper;” and “Pump-priming growth, Editorial, Sept.30). All indicators were favourable for a rate-cut, be it the low crude oil prices or the postponement of any rate hike by the U.S. Federal Reserve. However, if the base effect due to low crude oil prices is reversed or if the U.S. announces a rate hike, curbing the resultant inflation can be a daunting task for the central bank. The onus is now on the central government to aid the GDP growth.
Sandeep Kumar Meena,
New Delhi
RBI governor Raghuram Rajan has leaned toward growth while announcing the rate-cut and the banks have to respond favourably to the move. Going forward, one can expect GDP growth to gain momentum and as growth assumes centre stage, stress on the system would automatically ease, paving the way for a reduction in non-performing loans, which has been a burning issue for banks for quite some time now.
Srinivasan Umashankar,
Nagpur
Finance Minister Arun Jaitley’s statement that the government may take a decision to reduce interest rates of small savings schemes is a body blow to lakhs of investors who have put their hard-earned savings in various schemes of post offices. They include retired people and widows. The government is, perhaps, trying to encourage the investors to deposit the money in banks instead of post offices. However, what is the guarantee that it would not reduce interest rates in banks afterwards? In the absence of adequate social security provisions, small investors rely solely on their savings. Instead of reducing the interest rates, the government should increase it to benefit the senior citizens and other disadvantaged people.
K. S. Sundaram,
Bengaluru
There is a small section of Indians, especially senior citizens, who live solely on interest earned from fixed deposits. I hope banks keep the interests of this forsaken group also in mind while cutting interest rates.
K.I. John,
Thiruvananthapuram
