As many as 70 banks, including 23 public sector lenders, have not passed on the benefits to their consumers from RBI’s two rate cuts so far in 2015.
Reserve Bank of India cut the repo rate by 0.25 per cent on January 15 and further by 0.25 per cent on March 4.
Out of 91 scheduled commercial banks in the country, a total of 21 banks have lowered their base rates after RBI’s rate cut decisions, Minister of State for Finance Jayant Sinha said. These include four public sector banks, six from the private sector and 11 foreign banks.
The reduction in base rates has been in the range of 0.1-0.5 per cent so far.
This leaves as many as 70 banks that have not lowered their rates, despite RBI easing its monetary stance twice.
“Following the reduction in the policy rate, out of 91 scheduled commercial banks, 21 banks reduced their base rates in the range of 0.1-0.5 per cent so far (up to April 15)” Sinha said in written reply to a Rajya Sabha question.
Accordingly, he said, the weighted average lending rates on fresh rupee loans sanctioned by banks for housing and vehicle loans have also come down in the range of 8.53 basis points during the same period.
There are 27 public sector banks, 20 private sector and 44 foreign banks with scheduled commercial bank license in the country. The PSU banks have 70 per cent market share.
In RBI’s last monetary policy meeting earlier this month, Governor Raghuram Rajan was very critical of banks for not passing on the rate cut benefits to the borrowers.