RBI emphasises on quick transmission of monetary policy action by banks

The Reserve Bank of India (RBI) on Thursday emphasised on the quick transmission of monetary policy action by banks while taking feedback on hurdles to pass on rate cuts, the current liquidity conditions and year-end pressures. 

RBI Governor Shaktikanta Das held the first meeting with heads of select commercial banks after the monetary policy review on February 6, 2019. The governor wanted to know the handicaps in transmitting the monetary policy decisions, bankers aware of deliberations at the meeting said. 

The meeting focused on efficient transmission into a bank’s lending rates. The RBI has flagged its concern that the central bank does a lot of groundwork on the monetary policy stance, but that is not reflected in the banks’ decisions, senior bankers said.