RBI will continue accommodative stance as long as it is necessary and growth revives, said RBI Gov Shaktikanta Das.
The industry emphasised that it was now critical for banks to facilitate a faster transmission of rate cuts.
The repo rate has been brought down to 5.15 per cent to help reduce borrowing costs for home and auto loans.
RBI Governor Shaktikanta Das has already hinted further monetary policy easing while space for fiscal space is limited.
With current inflation remaining benign, we expect RBI to opt for a 40 bps rate cut, said Yes Bank's Yuvika Oberoi.
RBI has already slashed the repo rate (short-term borrowing rate) four times aggregating to 1.10 percentage points since January.
The RBI has mandated all banks to link their loans with external benchmarks, such as repo.
RBI Governor Shaktikanta Das also reinforced his dovish bias due to weak inflation and negative output gap.
The external benchmark for all floating rate loans for MSME, housing and retail loans effective October 1, 2019.
Economic growth hit over six-year low of 5 per cent for the first quarter ended June 2019 mainly driven by demand slowdown.