After over a dozen public sector banks, including the State Bank, have voluntarily linked their loans and deposits pricing to the repo rate, Reserve Bank Governor Shaktikanta Das on Monday stressed on the need for the entire system switching to this model, saying such a moved can speed up the monetary transmission process.<\/p>\n\n\n\n
While the SBI was to first one to link its loans and deposits to the repo rate from May and home loans from July, six other peer banks like the Bank of Baroda, Union Bank, and Canara Bank among others announced the same last week under which the asset side pricing has moved down fast.<\/p>\n\n\n\n
Das explained that the RBI has kept the external benchmarks in abeyance earlier because \u201cwe wanted to see how the market evolves. It is a positive trend to which banks have responded and are now linking their lending rates, especially the new loans, to the repo rate and other external benchmarks.<\/p>\n\n\n\n
\u201cBut this process needs to be faster. Today, the economy requires a certain amount of push not just from the monetary policy but also from its transmission,\u201d he said and expressed his optimism that more transmission will be faster.<\/p>\n\n\n\n
Though he expressed his concern over the steady dip in growth, Das said a \u201cmood of doom and gloom isn\u2019t going to help anyone and what is important to look at the positives\u201d, But he was also quick to add growth has become the highest priority for all, and that every policymaker is concerned with it.<\/p>\n\n\n\n
These six PSBs announced the switch-over after the last monetary policy wherein the RBI lowered the repo rates by 35 bps to a nine-year low of 5.4 per cent and has ruled out asking banks to do so saying \u201cbanks are just about coming out of the NPA mess and it seems that they need to be given more time to improve their finances.\u201d<\/p>\n\n\n\n
The process of shifting to an external benchmark on rates needs to be faster and our expectation is that they should move faster, Das told the annual banking conference organised by the industry lobby FICCI here this morning.<\/p>\n\n\n\n
He also assured that liquidity will not be a deterrent for growth as he admitted that issues like the crisis at NBFCs, liquidity crisis for some critical sectors, and monetary transmission and banking reforms do affect business community as also the economy as a whole.<\/p>\n\n\n\n
Noting that the global banking system as a whole is more resilient to cushion risks now, he said it is important to look at financial stability as this alone can ensure long term growth.<\/p>\n\n\n\n
Stating that the weaker-than-expected growth with signs of slowdown is the key risk to global financial stability today, the governor warned that headwinds to financial stability can emanate from payments, credit and external markets.<\/p>\n","protected":false},"excerpt":{"rendered":"
After over a dozen public sector banks, including the State Bank, have voluntarily linked their loans and deposits pricing to the repo rate, Reserve Bank Governor Shaktikanta Das on Monday stressed on the need for the entire system switching to this model, saying such a moved can speed up the monetary transmission process. While the […]<\/p>\n","protected":false},"author":1,"featured_media":68495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-68494","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/68494","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=68494"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/68494\/revisions"}],"predecessor-version":[{"id":68496,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/68494\/revisions\/68496"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/68495"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=68494"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=68494"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=68494"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}