RBI Governor asks banks for transmission of rate cut to customers

Since February 2025, the RBI has trimmed the key policy rate by 125 basis points to 5.25% to support growth. India recorded an 8% GDP growth in the first half of the current financial year

Reserve Bank Governor Sanjay Malhotra on Tuesday met the MD and CEO of public sector banks and select private sector banks here and urged them to pass on the rate cut to support sustainable growth.

Since February 2025, the RBI has trimmed the key policy rate by 125 basis points to 5.25 per cent to support growth. India recorded an 8 per cent GDP growth in the first half of the current financial year.

During the meeting, the RBI Governor observed that while there has been steady improvement in the health and operations of the banking sector in 2025, banks must avoid complacency and remain vigilant in a dynamic environment, the central bank said in a statement.

He noted that the 125 basis points easing, combined with greater use of technology, should translate into lower intermediation costs and higher efficiency, thereby supporting sustainable growth and deeper financial inclusion, it said.

Emphasising better customer service, he urged banks to focus on reducing grievances and strengthening internal systems.

He highlighted the growing risks from digital fraud and called for more robust, intelligence-driven safeguards.

Appreciating banks' efforts on re-KYC and unclaimed deposits, he encouraged proactive outreach and sustained awareness campaigns.

He reaffirmed the Reserve Bank of India's consultative approach, referring to recent initiatives in the consolidation and simplification of regulations.

The meetings were also attended by Deputy Governors T Rabi Sankar, Swaminathan J, Poonam Gupta and S C Murmu, along with the Executive Directors-in-Charge of Supervision, Regulation, Enforcement, and Consumer Education and Financial Inclusion.

These interactions form part of the RBI's ongoing engagement with the senior management of regulated entities; the previous such meeting was held on January 27, 2025.