India News - There's a limit to lowering India's interest rates, says SBI chairman

India News - There's a limit to lowering India's interest rates, says SBI chairman
India News - There's a limit to lowering India's interest rates, says SBI chairman

Thank you for reading the news about There's a limit to lowering India's interest rates, says SBI chairman and now with the details

Aden - Yasmine El Tohamy - State Bank of India chairman Rajnish Kumar said that banks cannot lower interest rates beyond a threshold due to asset-liability mismatch issues.

"We can't lower the interest rates without lowering the interest rate for depositors and there is a threshold below which we cannot reduce the interest rate for deposits," he said at the FICCI's 92nd Annual Convention, titled 'India: Roadmap to a $5 Trillion Economy'.

On transmission of monetary policy, there has been constant nudging from the Reserve Bank of India to pass the reduction in repo rates by the whole amount to make the retail loans cheaper for consumers in a big push for consumption. This theory is not bought by commercial banks, who argue if they do 100 per cent transmission, then they will have no margin and will have to lower the deposit rates.

This may see a flight of depositors from banks and also small savings rates are higher than the bank deposit rates which will make PSU bank deposit rates further unattractive.

RBI governor Shaktikanta Das has been aggressively pushing for transmission of rates and has held multiple meetings with banks on the issue.

After the introduction of the external benchmark system, most banks have linked their lending rates to the policy repo rate of the central bank.

Against the cumulative reduction in the policy repo rate by 135bps during February-October 2019, transmission to various money and corporate debt market segments ranged from 137bps (overnight call money market) to 218bps (three-month commercial papers of non-banking finance companies).

These were the details of the news India News - There's a limit to lowering India's interest rates, says SBI chairman for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at Khaleej Times and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV NorthConnex Tunnels are opening in northwest Sydney, providing an alternative route...
NEXT Migrants hoping to reach EU stranded in Bosnian woods as cold sets in