New Delhi, Feb. 7 -- The Monetary Policy Committee (MPC) of the Reserve Bank of India, led by Governor Sanjay Malhotra, has proposed a new repo rate of 6.25%. The new rate is likely to spur demand for retail loans, which should further boost liquidity in the economy, and therefore encourage consumption and boost economic growth.

The bankers welcomed the Reserve Bank's decision to cut the benchmark lending rate by 25 basis points saying it will spur growth and complement the announcements made in the budget.

They also hailed RBI's announcement to defer the implementation of the revised liquidity coverage ratio by one year.

"Since the budget has proposed measures to propel domestic consumption and higher government capex, this rate reduc...