RBI’s advice to banks: Give the benefit of 0.50% interest deduction to customers immediately, know details
The Reserve Bank of India (RBI), in one of its reports on Thursday, advised all banks that you should give the benefit of cutting the policy rate by 0.50 percent to the bank customers immediately. That is, the rate of debt should be reduced. Let me tell you, MPC led by RBI Governor had cut the policy rate i.e. repo rate by half percent. According to PTI news, an article was published in the June Bulletin of the Reserve Bank stating that financial conditions remain suitable for the facility of efficient broadcast of the Reserve Bank.
Financial conditions remain favorable
According to the news, an article published in the June Bulletin of the Reserve Bank emphasized that financial conditions remain favorable for the facility of efficient broadcast of rate cuts. Most of the banks have given the benefit of the rate cuts declared in February and April to their customers. Several major banks, including SBI, Bank of Baroda and HDFC Bank, have offered benchmark borrowed rate to customers on June 6 by the RBI within a few days of the RBI within a few days of a huge reduction of 50 basis points.
CRR was cut by 1%
In addition to cutting the repo rate by 50 basis points in the repo rate, the RBI had announced to bring it to 3 percent of pure demand and time liabilities (NDTL) by cutting 100 basis points in the cash reserve ratio (CRR) in a phased manner during the second half of the year. An article on the ‘situation of the economy’ in the Reserve Bank’s June 2025 bulletin states that the decrease in CRR will release the primary liquidity of about Rs 2.5 lakh crore in the banking system by December 2025.
The ideas expressed in the article are of writers
However, the central bank stated that the ideas expressed in the bulletin article belong to writers and do not represent the views of the Reserve Bank of India. The article discusses that the cut of 50-BPS in policy repo rate during February-April 2025 is reflected in the marginal cost of repo-linked external benchmark-based lending rates (EBLR) and fund-based lending rate (MCLR). The effect of this was that during the period of February-April 2025, the weighted average lending rate of banks declined by 6 basis points and 17 basis points respectively. On the deposit side, during the same period, the average domestic term deposit rates weighted on new and outstanding deposits were reduced by 27 basis points and 1 basis points respectively.
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