Easy liquidity led to faster money transmission, helped private sector: RBI

The RBI since February 2019 has slashed the benchmark lending rate by 250 basis points (bps). Of this, 115 bps cut has taken place this year

The Reserve Bank on Thursday said monetary transmission has improved considerably due to comfortable liquidity conditions and banks have passed on the benefit to borrowers by reducing lending rates by about 1.62 per cent in the last nearly one-and-a-half years.

Defending the easy liquidity stance, RBI Governor Shaktikanta Das said the private sector entities have benefitted out of the policy.

Das said the measures, which got adopted with deep rate cuts, have also ensured faster transmission of the policy rates into the actual lending by banks, in turn helping the economy. At present, the overall excess liquidity is at over