RBI to push for loan interest rate cuts this week
Reserve Bank of India’s (RBI) Governor, Shaktikanta Das, said he will meet heads of public and private sector banks this week to discuss transmission of loan interest rate cuts to borrowers. He added that transmission of monetary policy decisions is important.
Das also discussed the MSME restructuring scheme where the RBI recently announced a package for units having outstanding loans of up to Rs 25 crore. "All those cases are covered under the restructuring scheme. So now the ball lies in the court of the banks to restructure loans of eligible MSMEs," he said.
Speaking about the transmission of loan interest rate cuts, Das said, "Transmission of rates is very important especially after central bank announces a rate cut. It's already stated in our post MPC conference. I am having an interaction with CEOs and MDs of banks, both public and private sector, on February 21.”
Earlier this month, the RBI cut the benchmark interest rate for loans by 0.25 percent to 6.25 percent. However, only a handful of banks, including SBI, have reduced their rates, and by just 0.05 percent. "The effort of the RBI is to constructively engage with all the regulated entities, including the banks, to ensure the compliance of various regulatory requirements," Das said.
Last week, RBI warned Yes Bank of regulatory action for disclosure of nil divergence report in violation of norms. Yes Bank, in a press release earlier last week, had said the RBI has not found any divergence in the asset classification and provisioning done by the lender during 2017-18.
In a regulatory filing last week, Yes Bank said it has received a letter from the RBI which noted that the Risk Assessment Report (RAR) was marked 'confidential', and it was expected that no part of the report be divulged except for the information in the form and manner of disclosure prescribed by regulations.
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