February 2 2016, 14.23 PM IST || Pocket News Alert
“Since January, the RBI has reduced the repo rate by 125 basis points in four separate cut this year. However, the banks have not been generous enough to pass on the entire benefit of this reduction to end consumers and less than half of the cumulative policy repo rate reduction of 125 bps has been transmitted by banks. The median base lending rate has declined only by 60 bps.
While RBI has taken steps to considerably reduce rates, the interest rate transition from banks to the consumers has been gradual. Across the year, the total of 125 bps cut in the rates has been already done and now much depends on how banks transmit the benefit to home buyers.
We sincerely hope that both Finance Ministry as well as the RBI push all the Banks to transfer the benefits to the end consumer, else these moves will severely stop short of benefiting the consumer and only help in buffering the bottom lines of the bank."
