RBI's repo rate cut largely in consonance with market expectations: SBI Chairman

State Bank of India Chairman Rajnish Kumar on Thursday hailed the RBI monetary policy announced earlier in the day, saying that the decision to cut repo rate by 25 basis points (bps) was largely in consonance with the market.

"The downward revision in the GDP and inflation projections reveal near term global headwinds and lower than anticipated rainfall might add to uncertainties. On the regulatory front, the decision to categorise additional two per cent of excess SLR for LCR calculation is a welcome step for the banks for releasing additional liquidity," said Kumar in a statement on Thursday evening.

He also stated that the decision to explore the development of the secondary corporate loan market and housing finance securitisation is well timed and will enable a better price discovery for market players in sync with their risk appetite.

"The proposal to put in place a TAT framework for the resolution of customer complaints as well as compensation framework will cheer up the customer community. Overall, it is a forward-looking policy catering to the demands of the various market participant's." the statement said.

The RBI on Thursday cut repo rate for the second consecutive time this year to 6 per cent from the current 6.25 per cent, a move that will cheer industry leaders over relief from high borrowing costs a week before the first phase of general elections.

The six-member Monetary Policy Committee (MPC) headed by Governor Shaktikanta Das concluded its first meeting for the fiscal year 2019-20 with a decision to maintain the policy stance 'neutral.' On February 7, the central bank had reduced the key lending rate by 25 basis points.

The repo rate is the rate at which the RBI lends money to commercial banks. A repo rate cut allows banks to reduce interest rates for consumers on loans and lowers equal monthly installment on home loans, car loans and personal loans.