RBI Governor Shaktikanta Das takes public sector banks to task on rate cut

Das says banks must improve their recovery mechanism

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday came down heavily on public sector banks (PSBs) for not reducing their lending rates despite liquidity remaining ample, bond yields being at a multi-year low, and policy rates being lowered by 75 basis points (bps) in the past six months.

“Bond yields have come down, policy rates have fallen, the borrowing cost for banks is low, as is evident from softening rates on certificates of deposit (CD), and liquidity is in surplus. I am surprised banks are still not lowering lending rates,” Das told top PSB executives during a meeting,