Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
10,829.3588.0
Stock Analysis, IPO, Mutual Funds, Bonds & More

RBI may come out with guidelines on transmission of policy rates: Shaktikanta Das

The RBI chief said discussions with several banks are on and he will discuss it again to ensure full transmission.

, ETMarkets.com|
Apr 04, 2019, 01.22 PM IST
0Comments
BCCL
Shaktikanta-Das---BCCL-1
Some banks, including State Bank of India (SBI), Bank of Baroda, Punjab National Bank and Kotak Mahindra Bank, have cut their MCLR recently, but only after a nudge from the RBI.
NEW DELHI: Underlining the importance of transmission of RBI rate cuts by banks to consumers, Governor Shaktikanta Das on Thursday said the central bank may come out with guidelines on the same.

"We hope to come out with guidelines for rate cut transmission by banks," Das said, interacting with the media after the monetary policy committee (MPC) meet.

It may be noted that banks have not fully passed on the February rate cut to borrowers as yet. What is holding them back is higher interest rate on deposits and competition from the government for small savings.

The RBI chief said discussions with several banks are on and he will discuss it again to ensure full transmission.

"We have discussed this with banks in the past and realise that more needs to be done by the banks," he said.

Some banks, including State Bank of India (SBI), Bank of Baroda, Punjab National Bank and Kotak Mahindra Bank, have cut their MCLR recently, but only after a nudge from the RBI.

In March, SBI announced linking of its savings deposits rates and short-term loans to RBI's repo rate, going ahead. The new guidelines, which will come into effect from May 1, 2019, mean savings accounts having balances of above Rs 1 lakh and all cash credit accounts, overdrafts and short term loans above Rs 1 lakh will be linked to the repo rate.

The six-member monetary policy committee (MPC) on Thursday announced a 25 basis point cut in the short-term lending rate, also known as repo or repurchase rate, in its first bi-monthly rate review of 2019-20.

The repo rate, the rate at which the central bank lends funds to banks, now stands at 6 per cent.

In case the banks pass on the benefit of lower borrowing costs, EMIs may come down for retail borrowers.


0Comments

Also Read

RBI clarifies on free ATM transactions

RBI Deputy Guv resignation: Congress raises RBI independence issue

RBI portal for online complaints

RBI launches new strategy framework

From 'Panglossian countenance' to 'Floccinaucinihilipilification', RBI reinvents Greenspeak

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service