Banks should pass on rate-cut benefits to spur investment, says India Inc

The Reserve Bank of India on Wednesday decided to reduce the repo rate by 35 bps to 5.40 per cent

With the Reserve Bank of India (RBI) slashing the benchmark repo rate for a fourth straight time, India Inc on Wednesday said it was time banks passed on the benefits of rate cuts to end-customers, so as to encourage consumer spending and spur investment by companies.

The central bank has lowered the key policy rate by a cumulative 110 basis points (bps) in the current easing cycle — bringing the rates to a nine-year low. Meanwhile, banks have cut rates by only 29 bps.

“The RBI's step was absolutely necessary for reducing cost of capital more in line with