RBI governor says time other banks linked loans, deposits to repo rate

After over a dozen public sector banks, including State Bank of India, have voluntarily linked their loans and deposits pricing to the repo rate, Reserve Bank Governor Shaktikanta Das on Monday stressed on the need for the entire system switching to this model, saying such a move can speed up the monetary transmission process.

While SBI was the first one to link its loans and deposits to the repo rate from May and home loans from July, six other peer banks, like Bank of Baroda, Union Bank, and Canara Bank, among others, announced the same last week under which the asset side pricing has moved down fast.

The move comes even as the regulator has decided not to push banks for this, considering their poor finances.