RBI betting on India investment turnaround

Mumbai

THE Indian central bank is betting that benchmark interest rates at seven-year lows and the government's recent move to inject a record US$32 billion into struggling state lenders will be enough to revive private investment from a six-year slowdown.

Governor Urjit Patel kept the repurchase rate at 6 per cent on Wednesday and urged banks to pass on previous cuts to customers, saying that better transmission will enhance the allocation of money across companies choked by bad loans and sluggish demand. "Recapitalisation of public sector banks may help improve credit flows further," he said.