Prospects of floating lending rate, fixed deposits spook bankers

If the private sector banks don't play ball, there is very little public sector banks can do to make the product a success

The Reserve Bank of India’s (RBI’s) plan to formalise repo rate as the external benchmark for lending is possible only when deposit rates are also linked to the same benchmark and all banks together move at least a part of their deposit portfolio to floating rates, say bankers and analysts.
 
If the private sector banks don’t play ball, there is very little public sector banks (PSBs) can do to make the product a success. A workable solution is that the lending can be done to the extent the bank has managed to garner floating rate deposits. Otherwise, there could