Reserve Bank of India Governor Raghuram Rajan went with the majority view of the external members of its monetary policy committee that suggested a repo rate cut at the April review, according to the minutes released on Thursday.
One member recommended narrowing the interest rate corridor—the rate at which RBI lends and borrows from banks—to 50 basis points from 100 basis points, a suggestion which was also implemented in the policy review on April 5.
The policy committee, which comprises five external members, the governor and four deputy governors, does not have any voting powers and is purely advisory in nature.
The RBI governor is the sole deciding authority on monetary policy decisions.
Two of the four external members suggested a 25-basis-point cut in the repo rate while the other two wanted a 50-basis-point cut, the RBI said. The fifth member suggested that rates be left unchanged.
The RBI lowered the repo rate by 25 basis points to 6.50 per cent, the lowest in over five years and also raised the reverse repo rate by 25 bps to 6 per cent.