Earlier this month, the Reserve Bank cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.
New Delhi: Reserve Bank Governor Shaktikanta Das Monday said he will meet heads of public and private sector banks this week to discuss transmission of interest rate cuts to borrowers.
Speaking to reporters after Finance Minister Arun Jaitley addressed the board of the central bank here, he said transmission of monetary policy decisions is important.
"Transmission of rates is very important especially after central bank announces a rate cut. It's already stated in our post MPC conference. I am having an interaction with CEOs and MDs of banks, both public and private sector, on February 21," Das said. Earlier this month, the Reserve Bank cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.
However, only a handful of banks, including SBI, have reduced their rates, that too by just 0.05 per cent. On the MSME restructuring scheme, Das said RBI recently announced a package for units having outstanding loans of up to Rs 25 crore.
"All those cases are covered under the restructuring scheme. So now the ball lies in the court of the banks to restructure loans of eligible MSMEs," he said.
Asked about regulatory action against some private sector lenders, the Governor said the Kotak Mahindra Bank case regarding dilution of promoter stake is pending in court.
"So, it would not be correct on my part to comment on that matter because it is sub-judice. With regard to Yes Bank, it's the issue between the regulator and regulated entity. "Having said that, I would like to also say that the effort of the RBI is to constructively engage with all the regulated entities including the banks to ensure the compliance of various regulatory requirements," he said.
Last week, RBI warned Yes Bank of regulatory action for disclosure of nil divergence report in violation of norms. Yes Bank in a press release earlier last week had said the RBI has not found any divergence in the asset classification and provisioning done by the lender during 2017-18.
In a regulatory filing on Friday, Yes Bank said it has received a letter from the RBI which noted that the Risk Assessment Report (RAR) was marked 'confidential' and it was expected that no part of the report be divulged except for the information in the form and manner of disclosure prescribed by regulations. On credit offtake, Das said some growth is visible.
"The aggregate flow of finance and credit to commercial sector has shown some improvement but it is not broad based. It is not flowing in various sectors the way it should be," he said.