RBI Governor Urjit Patel has said that effective transmission of policy rate holds the key to achieve desired economic growth. As per the Minutes of the Monetary Policy Committee Meeting held earlier this month, Dr. Patel has said that even though transmission has improved; there is still scope for banks to cut lending rates. While supporting a quarter percent cut in policy repo rate; the RBI Governor had said that resolution of stressed assets of banks is important to revive credit demand and the investment cycle. Observing that current low level of food prices is unusual and is vulnerable to upward pressures; Dr. Patel said that it needs to be seen whether deflation in food items is sustainable, despite a normal monsoon. RBI Deputy Governor and MPC member Viral V Acharya too had voted for a 25 basis points rate cut; expressing concerns about the impact of farm loan waivers on inflation and growth. He had suggested that the focus should be on improving the conditions for sound transmission such as healthy bank and corporate balance sheets, market-based benchmarking of bank lending rates and a thriving corporate bond market. The other two members of the MPC; Chetan Ghate and Pami Dua had also supported 25 basis point rate cut. Meanwhile, voting for a status quo on rates, Dr. Michael Patra had said that inflation targeting framework has to be forward-looking. Stating that there is still uncertainty around the inflationary impact of the roll-out of GST and due to the implementation of HRA under the 7th Central Pay Commission; Dr. Patra had said that the central bank should strive to achieve the mandated inflation target with good policy. On the other hand, Dr. Ravindra Dholakia had pleaded for a rate cut of 50 basis points on the basis of declining inflation and good and progressive monsoon which may help keep the food inflation under control.