Government to press PSBs for rate cut
The government will lean on state-run banks that are reluctant to pass on the full effect of measures taken by Reserve Bank of India (RBI) in the form of rate cuts that are badly needed to shore up growth. After RBI lowered the policy rate by 25 basis points and took a range of measures to enhance liquidity, the government feels banks have little excuse not to pass on benefits to consumers. One basis point is 0.01 percentage point.
Some banks had cut rates marginally after the new marginal cost of funds based lending rate (MCLR) regime was rolled out at the start of the month, but the government feels there is room for much more.
Contact: Reserve Bank of India