Most banks have transmitted between 5 basis points and 45 basis points (bps) of the 50 bps of cuts in the repo rate effected by the Reserve Bank of India (RBI) since the beginning of the financial year 2016-17, reports fe Bureau in Mumbai.
While the prime lending rate has moved from 6.75% at the beginning of April to 6.25%, State Bank of India has reduced its one-year marginal cost of funds-based lending rate (MCLR) from 9.2% to 8.9% over the same period. One-year MCLRs at large private lenders – ICICI Bank and HDFC Bank – have followed the same trajectory.
Other private banks have done better on transmission, with Axis Bank and Kotak Mahindra Bank reducing one-year MCLRs by 45 bps since April, and YES Bank transmitting the entire quantum of cuts to bring down its one-year MCLR to 9.1% as on
Monday. In its next monetary policy review on Wednesday, the RBI is widely expected to lower the repo rate by 25 bps.