Earlier this month, RBI Governor Raghuram Rajan was very critical of banks for not passing on the rate cut benefits to the borrowers.
As many as 70 banks, including 23 public sector lenders, have not passed on the benefits to their consumers from RBI’s two rate cuts so far in 2015.
Reserve Bank of India cut the repo rate by 0.25 per cent on January 15 and further by 0.25 per cent on March 4. Out of 91 scheduled commercial banks in the country, a total of 21 banks have lowered their base rates after RBI’s rate cut decisions, Minister of State for Finance Jayant Sinha said on Tuesday. These include four public sector banks, six from the private sector and 11 foreign banks.
The reduction in base rates has been in the range of 0.1-0.5 per cent so far. This leaves as many as 70 banks that have not lowered their rates, despite RBI easing its monetary stance twice. “Following the reduction in the policy rate, out of 91 scheduled commercial banks, 21 banks reduced their base rates in the range of 0.1-0.5 per cent so far (up to April 15),” said Mr. Sinha, in a written reply to a Rajya Sabha question.
Accordingly, he said, the weighted average lending rates on fresh rupee loans sanctioned by banks for housing and vehicle loans have also come down in the range of 8.53 basis points during the same period.
There are 27 public sector banks, 20 private sector and 44 foreign banks with scheduled commercial bank license in the country. PSU banks have 70 per cent market share. In RBI’s last monetary policy meeting earlier this month, Governor Raghuram Rajan was very critical of banks for not passing on the rate cut benefits to the borrowers.
A recent study paper from the International Monetary Fund (IMF) also pointed out that banks in India resist passing on RBI’s rate cuts to consumers, although they are rather quicker in responding to rate hikes by the central bank. It takes 13 months on an average for pass-through from a change in the RBI’s policy rate to the interbank rate.
Thereafter, it takes over nine months for change in deposit rates for customers and a much longer period of nearly 19 months in case of lending rates, the study found.
27-April-2015 18:35 IST
PM donates one month salary to PMNRF
The Prime Minister, Shri Narendra Modi, has donated one month's salary to the Prime Minister's National Relief Fund, for assistance to those affected by the recent earthquake. My Views On Bipartite Settlement
Now It is crystal clear that United Forum of Bank Unions committed a mistake by signing adhoc MOU with IBA in the month of Fab 2015 which contained a dubious clause of 2% restriction in rise of Basic Pay after merging of well agreed DA.
UFBU had failed in achieving full DA merger upto November 2012 and agreed to suggestion of IBA to restrict it to November 2011. It failed to achieve 25% growth in wages and it failed to achieve 5 days banking for which it struggled with ten lac bank staff for 30 months. Past is past, we should now make effort to brighten our future accord.
In view of inordinate delay in signing of X th Bipartite settlement, it is now suggested that UFBU should submit its Charter of Demand for XI th Bipartite Settlement immediately so that amicable settlement is signed with IBA on due date that is November 2017.It should also be kept in vision the probable shape of 7th pay commission report for central government employees and probable price rise during coming few years before drafting fresh Charter of Demand.
UBFU should at least start consultation process without delay with various units so that it takes a good shape before it is presented to IBA. Similarly bank staff who were annoyed and who are annoyed with present leaders and who formed new entity to fight for respectable wage hike should now renew their effort in the direction which thy think fittest. They may suggest best pay scale for XI the bipartite settlement to UFU or they ma ask for change in leadership as they are accusing present leadership since long.
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