Rajan further said there is a pick up in the economy and the rural economy may also see an uptrend if monsoon improves and sowing is good.

“I think if the Chinese depreciation holds to about this level, it’s not something that one should be overly concerned about”, Rajan said at a banking event in Mumbai.

In an interaction following the monetary policy announcement earlier this month, Rajan had said that while banks do not have a significant direct exposure to the real estate sector, a slowdown in the property sector can have an impact on a number of other industries like cement and steel, which rely on demand from home builders.

State Bank of India is keen on bringing back home loans below the Base Rate (popularly called teaser loans) to boost credit offtake and demand.

“The Chinese move raised some questions about the true strength of its economy also”, Mr Rajan said while speaking at the second SBI Banking and Economics Conclave. “That’s a worrisome trend”, he said.

The transmission of interest rate cuts is taking place through the markets, said Dr Rajan replying to the complaints about the lag in passing on benefits of rate cuts.

“If it’s part of a process of getting competitive advantage through… longer-term depreciation it has to be worrisome across the world, partly because you could have tit-for-tat actions”, he added.

On crowdfunding, he said RBI was keeping a watch on it and said “we must be more active in gathering intelligence, even by using social media”. “On all these, there is more information available now”.

The RBI had also cuts it’s growth projection in the June policy statement to 7.6 per cent, and maintained it in the August month review.

The RBI is set to announce its next monetary policy on September 29. RBI granted “in principle” approval for Payments banks to 11 entities.

“The bank branch can become a centre of activity, helping with cash handling or do some completely new work…There is a lot of scope for everyone… not everybody will succeed but this is a revolution which can happen”, he added. They are an add-on to the banks rather than competitors. “Various banks are looking at increasing their rural reach, including big banks like SBI, payments banks will help them realise this”, Jaitley said. “These (payment) banks will not as much compete as compliment the existing system, by traversing the last mile”.