Home / Economy / Analysis / Markets were expecting a rate cut; onus now on banks to pass on the benefit

Markets were expecting a rate cut; onus now on banks to pass on the benefit

Given the severity of the situation due to the Covid-19 pandemic, the timing of rate transmission holds great significance.

Web Exclusive Premium

Ambareesh Baliga, independent market expert (Photo: Kamlesh Pednekar)

3 min read Last Updated : May 22 2020 | 12:27 PM IST

The Reserve Bank of India's (RBI) decision to lower the repo rate by 40 basis points (bps) to 4 per cent on Friday is indeed a positive and welcome step. Both the government and the RBI are doing everything that is required at this crucial juncture to help stem the economic fallout of the Covid-19 pandemic.

However, the issue is whether this reduction in rate is passed on by the banks to the industries and other segments. As seen earlier as well, the transmission of interest rate cut to the end consumer has been slow. Hence, we need to watch

Topics : Coronavirus Lockdown Gross Domestic Product (GDP) Indian markets Markets RBI Policy GDP

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in