Top News

Mumbai : An article published in the Reserve Bank of India’s (RBI) June Bulletin has said that all banks should bring down their lending rates for speedy transmission of the policy rate, which was lowered by 50 basis points earlier this month. The article stressed that the financial conditions remained conducive to facilitating an efficient transmission of rate cuts. Most of the banks have already passed on the rate cuts announced in February and April to their customers.

It stated that besides reducing the repo rate by 50 bps earlier this month, the RBI had announced a reduction in the cash reserve ratio (CRR) by 100 bps to 3 per cent of net demand and time liabilities (NDTL) in a staggered manner during the latter half of the year. It said financial conditions remained conducive to facilitate an efficient transmission of rate cuts to the credit market. The reduction in CRR would release primary liquidity of about Rs 2.5 lakh crore into the banking system by December 2025. Besides providing durable liquidity, it will reduce the cost of funds for banks, thereby facilitating monetary policy transmission to the credit market.

The article noted that the 50-bps cut in the policy repo rate during February-April 2025 reflected in banks’ repo-linked external benchmark-based lending rates (EBLRs) and marginal cost of funds-based lending rate (MCLR). Consequently, the weighted average lending rate (WALR) on fresh and outstanding rupee loans of banks declined by 6 bps and 17 bps, respectively, during the period February-April 2025. On the deposit side, the weighted average domestic term deposit rates (WADTDRs) on fresh and outstanding deposits moderated by 27 bps and 1 bp, respectively, during the same period. However, the central bank said that the views expressed in the Bulletin article are those of the authors and do not represent the views of the Reserve Bank of India.

Bhupendra singh chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur kiranhis insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.