RBI Says all Banks Should Link Loans, Deposits to Repo Rate
RBI Says all Banks Should Link Loans, Deposits to Repo Rate https://www.fundstiger.com/rbi-repo-rate-2019/ The Reserve Bank of India (RBI) is considering asking banks to link loans to an external benchmark such as the repo rate to improve transmission of policy rates and foster economic growth. In December, RBI said that banks must set their interest rates for new loans against an external benchmark beginning 1 April. The rule was supposed to apply to all new retail loans and small business loans with floating rates from that date. The proposal, however, was opposed by bankers who wrote to the regulator citing their concerns. In April, Das postponed the linking to external benchmarks and said RBI would discuss the proposal with the parties concerned before taking a decision on implementing it. All Banks Should Link Loans, Deposits to Repo Rate While SBI was the first one to link its loans and deposits to the repo rate from May and home loans from July, six other peer banks,...