RBI Focuses on Effective Transmission of Rate Cuts to Lending Rates

Governor Sanjay Malhotra emphasizes the Reserve Bank of India's priority on ensuring effective transmission of policy rate cuts to lending rates. He also anticipates moderation in deposit rates, urging savers to consider real interest rates over nominal rates. Discussions on bank participation in commodity derivatives are ongoing.

The Reserve Bank of India, under Governor Sanjay Malhotra, is placing significant emphasis on effectively transmitting policy rate cuts to lending rates to benefit borrowers, he announced during the post-policy review press briefing on Friday.

Malhotra also addressed potential moderation in deposit rates, urging the public to focus on real interest rates, influenced by the current low inflation, rather than solely on nominal figures.

Furthermore, the central bank is considering the prospect of allowing banks to trade in commodity derivatives, as communication from Sebi prompts a review of existing regulations, although changes may necessitate amendments to the Banking Regulation Act.

(With inputs from agencies.)