Banks must transmit rate cut: India Inc

New Delhi: With the RBI slashing the repo rate by 35 basis points, India Inc on Wednesday said its swift and full transmission by banks in the form of lower lending rates will be crucial to lift consumption and investment in the economy.

The Reserve Bank of India's (RBI) Monetary Policy Committee on Wednesday cut the interest rate by 35 basis points -- the fourth successive reduction -- to a nine-year-low level, in an attempt to boost an economy growing at its slowest pace in nearly five years.

"With today's (Wednesday's) cut, the RBI has lowered the policy rate (repo) by 110 basis points in the current calendar year. The central bank has also kept liquidity in the surplus mode, and it is now critical for banks to move fast and transmit this ease in policy rate in the form of lower lending rates. Unless the transmission is swift and full, we may not see a change in the consumption and investment trajectory," Ficci President Sandip Somany said.