50 bps rate cut will see revival in investment cycle: B Sriram, SBI

In a chat with ET Now, B Sriram of SBI, shares his thoughts on the RBI monetary policy. Excerpts:



ET Now: What is your sense now that the Governor has cut 50 bps - do you think the banks will be able to translate that into another 20 or 30 bps cut?

B Sriram: Difficult to say, but it has been a pleasant surprise. Now we need to brainstorm and decide how this will translate into bank interest rates.

ET Now: Ultimately it all just boils down to one factor - if 75 bps rate cut has not started an investment cycle, can an additional 50 bps rate cut do the magic?

B Sriram: It should. The issue is in terms of the stance as well as in the direction which the RBI has taken. 125 bps rate cut is a substantial number and going forward as the transmission happens across the banking industry, it will definitely give a fillip to domestic demand and also to investments. I am sure this will translate into better growth figures.