Business & Economy

RBI keeps bank rates unchanged

What is India News Service, Wednesday, 27 October 2004, 2000 hrs IST


The Reserve Bank has kept the bank rate unchanged although inflation has firmed up over the last few months.

The bank has also not indicated whether the rate would be hiked in the near future.
Currently, the rate of inflation is moving at around seven per cent against the bank rate of six per cent. Commercial banks take a cue from the bank rate to fix their deposit rates.

But in the absence of any indication from the Reserve Bank, banks are unlikely to effect changes in their rates. The central bank, however, has raised the repo rate, the rate at which banks park their temporary surpluses with RBI, by 25 basis points to 4.75 per cent.

RBI Governor Y V Reddy said the government and the RBI had responded to the price rise, notably the oil shock in a harmonised manner. 

If the oil price rise were to be passed on to the consumer entirely, it would have resulted in inflation shooting up. But that has not happened.


Pakistan eyes BPO pie: Years after watching India reap rich dividends from the outsourcing phenomenon, Pakistan is also taking tentative steps towards call centres and other low-cost IT services.

FMO takes stake in Shriram firms: FMO N.V., a Dutch development finance company, has acquired a 3.95 per cent stake each in two principal truck-financing companies of the Chennai-based Shriram Group. 

Trai asks Airtel to refund fee: The telecom regulator said that the charge levied by Airtel for migration services was not done in a transparent manner.

Infrastructure growth marginally higher: The infrastructure sector grew by 5.7 per cent in the first half of the current fiscal against 5.4 per cent in the same period of last financial year, mainly on account of a good performance by the petroleum sector.

Birlasoft expands operations: Birlasoft, the IT arm of the CK Birla group recently inaugurated a software development centre in Noida. 

Overall:

RBI kept credit policy unchanged: As a result, commercial bank interest rates are unlikely to change.

Pakistan eyed BPO business: The country wants to emulate India and is taking tentative steps to provide low-cost IT services.

Trai rapped Airtel: The regulator said the mobile phone company wasn't transparent in levying a migration fee.