RBI Governor Shaktikanta Das
In a meeting with public sector bank (PSB) chiefs on Tuesday, Reserve Bank of India (RBI) Governor Shaktikanta Das
reviewed the process of transmission of lower policy rates being undertaken by the state-owned banks.
governor also reviewed the credit off-take situation prevailing in the economy amid a slowdown, said sources. The RBI
had called a meeting of public sector banks
a day after Finance
Minister Nirmala Sitharaman met PSB chiefs in New Delhi.
A public sector bank chief, who attended the meeting with the RBI
governor, said: “It was a general meeting where monetary transmission and surprises that might spring up from the slippages point of view were discussed. Also, the RBI wanted to know if banks
are getting more conservative in credit facilities or not.” The RBI has reduced its benchmark policy repo rate by as much as 135 basis points since the start of the year, and it has been nudging banks to pass on the rates to consumers so that there is sufficient credit off-take. Bank chiefs reiterated that banks are not turning conservative when it comes to lending as they have adequate liquidity, and investing the excess liquidity in the overnight window of the RBI or in government securities will fetch them a lower yield.