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Saturday, May 28, 2011

Impact of RBIs Credit Policy

Both the Indian major Indices Sensex and Nifty were down by 463 and 136 points respectively followed by RBIs annual credit policy . rate sensative stocks led the decline onn fears of rising interest rates.
fears that Rising interest rates shll bring banks  credit growth down and shall shrink Net interest margin
Along with this RBI hiked the interest rate due on saving accounts by 50 basis points to 4% This shall bring more funds in banks saving account.despite this investors are advised not to keep more than necessary funds in saving account as it shall earn negative returns after adjusting the inflation.
hike in saving rate shall meke banks lending rates dearer as 36% of Indian population have saving accounts.

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