Statement: The Reserve Bank of India (RBI) cut the bank rate (the rate which is also an indicative rate for the banking system) by 25 basis points reducing it to six per cent. Conclusions : I. Banks are likely to resort to further cuts in the lending and deposit rates . II. The move of the RBI is an indication of a strong bias towards soft interest rate regime .

• if only conclusion I follows
• if only conclusion II follows
• if either I or II follows
• if neither I nor II follows, and