Looking at the current inflation, there is room for interest rates to fall by 50 basis points (bps) and that is something which India should be ready for, said Uday Kotak, managing director and CEO, Kotak Mahindra Bank.

One basis point is a hundredth of a percentage point.

Monetary Policy Committee is an independent body but interest rates need to come down and there is in fact room for it, Kotak said during a panel discussion at India Business Leader Awards (IBLA) in Mumbai on Thursday.

In the December MPC meeting, The Reserve Bank of India (RBI) kept the key policy rates unchanged in its fifth bi-monthly policy. With no change in the rates, the repo rate remains at 6.50 percent while the reverse repo rate stands 6.25 percent. The next monetary policy review is due on February 7.

"When I look at the rest of the world I believe even the US is beginning to realise that the 10-Year yield which was looking more like 3-3.5 percent in now at around 2.7 percent. So, even US interest rates hikes are expected to be zero or at the most 25 basis points hike in 2019," he said.

On the ownership issue of banks, Kotak said the next government should seriously consider it and the time has come to relook at the role of the state.

First Published:Jan 17, 2019 8:22 PM IST