Banks to transfer rate cuts to consumers |
Amid reports that banks are not transmitting the changed lending rates to its customers, the finance ministry on Monday said banks have agreed to take steps to review lending rates as they have not "commensurately" transmitted to borrowers, benefits of reduction in the policy rate by the RBI. Since December 2018, monetary policy has been eased substantially by the Reserve Bank of India with policy rates being cut by 75 basis points (bps) and policy outlook being changed to `accommodative`. An official release stated that banks need to commensurately transmit rate cut benefit in lending. In the meeting, banks agreed to take steps as per RBI guidelines to review their lending rates. RBI deputy governor N S Vishwanathan, who also attended the meeting, said the banking system has adequate and durable liquidity currently. The release was issued after a meeting between finance minister Nirmala Sitharaman and heads of public sector banks (PSBs) as well as private lenders, including HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and Citi Bank. Bankers also raised the issue of service tax that they have been facing. The matter of digitisation and reviewing of charges on digital payments was also discussed in the meeting.
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