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RBI Guv to meet bank CEOs today on rate transmission
RBI Governor Shaktikanta Das will meet PSU and PSB CEOs and MDs on Thursday to discuss rate transmission and persuade them to pass on the advantages after taking note of the non-passing of the benefits of lower interest rates to consumers following a key policy rate cut by it.
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New Delhi
“I will meet the private and public sector banks CEOs and MDs on February 21 over this because transmission of monetary policy decisions is important. We will see what needs to be done then,” Das said earlier this week during the RBI’s Central Board meeting.
Earlier this month,the RBI cut the benchmark interest rate by 0.25 pc to 6.25 pc. But PSU and private banks have not been passing on the resultant benefits of these rate cuts and in fact passed less than 5 pc cut to the customers.
The Governor said RBI has received a lot of comments on external benchmarks and it was currently examining them. The RBI is mandated to see whether banks are cutting lending rates in line with repo rates.
For this purpose, the RBI will start linking interest rates to external benchmarks replacing the Marginal Cost of Funds based Lending Rate (MCLR).
The home loan borrowers have often complained about the opacity of the interest rate fixing mechanism which allows banks not to pass rate cut benefits in lowering home and auto loan rates.
Govt to infuse Rs 48k cr in 12 PSU banks, PNB to get Rs 5,908 cr
The finance ministry said it will pump in Rs 48,239 cr in 12 public sector banks in this fiscal to help them maintain regulatory capital requirements and finance growth plans. Financial Services Secretary Rajiv Kumar said the Centre will infuse Rs 9,086 cr in Corporation Bank and Rs 6,896 cr in Allahabad Bank - the two “better-performing” banks currently under the Prompt Corrective Action (PCA) supervision of RBI. Punjab National Bank will get Rs 5,908 cr, Union Bank of India Rs 4,112 cr, Andhra Bank Rs 3,256 cr and Syndicate Bank Rs 1,603 crore. The government will pump in Rs 12,535 crore in four other banks under PCA.
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