RupeesMatter India | A blog on finance, investments, loans, personal loan, home loan, stock market and mutual funds in India

Reliance Mutual Fund has reduced exposure to Engineering Capital Goods, Metals Mining and Cement Construction sectors while has increased to Banking Financial Services, Pharmaceuticals and Utilities sectors.

The Reserve Bank of India, or RBI, has cut the repo rate and reverse repo rate by 100 basis points, or bps, each to 6.5% and 5% respectively. (100 bps = 1%) However, it has kept unchanged the CRR, or cash reserve ratio and SLR, or statutory liquidity ratio.

In view of the need to enhance credit delivery to the employment- intensive micro and small enterprises sector, it has been decided to provide refinance of an amount of Rs 7,000 crore (Rs 70 billion) to the Small Industries Development Bank of India under the provisions of Section 17(4H) of the Reserve Bank of India Act, 1934.

Both lending and deposit rates would be cut, Punjab National Bank chairman and managing director K C Chakrabarty told PTI.

“We have revised our interest rate by 1.5 per cent from 13 per cent to 11.5 per cent,” an ICICI Bank spokesperson said. This cut will, however, be applicable for only new home loans, the spokesperson said.

The rate at which RBI lends to banks is known as repo rate.

UCO Bank Chairman and MD S K Goel said that the bank is planning to cut the deposit rate by 50 basis points beginning next month.

ICICI Bank has reduced its interest rate for home loans of Rs 20-lakh and below to 11.5%.

Indian ADRs: Tata Motors, ICICI Bank, HDFC Bank, Wipro, Satyam, Infosys, Dr Reddys and Patni gained, while MTNL slipped.

Bankers expect RBI to drop rates though there may not be any increase in aggregate liquidity as banks are parking surplus funds with the central bank. Some sectors like the small and medium enterprises, real estate have not been getting adequate funds and RBI may extend a refinance line or special facility whereby they can borrow at a subsidised rate.