Letter to BS: Banks may come out with more customer-friendly measures

The column “How to make the horse drink water’’ by Tamal Bandyopadhyay (August 12) was thought-provoking. When rates are cut, banks only pass on a small percentage of the cut to borrowers and that too after a time lag. As for deposits, when banks pare down the rate, it is only for fresh deposits. The old deposits attract the earlier rate. 

The transmission of rate cut differentials is a complex exercise that each bank will have to undertake according to the strength of the balance sheet. Banks are accused of being greedy or lazy in passing on benefits of rate differentials