RBI Governor Advocates Rate Transmission for Economic Growth

Reserve Bank Governor Sanjay Malhotra urged banks to pass on the policy rate cut to promote sustainable growth. The RBI has reduced the rate by 125 basis points to 5.25% to support India's economic expansion. Malhotra emphasized technology adoption, customer service improvement, and digital fraud prevention.

RBI Governor Sanjay Malhotra met key figures from various banks on Tuesday, urging them to transmit the recent rate cut to foster sustainable economic growth.

Since February 2025, the central bank has reduced the key policy rate by 125 basis points to reach 5.25%, spurring an 8% GDP growth in the first half of the fiscal year. The Governor commended banks' health improvements but cautioned against complacency.

He highlighted the importance of integrating technology to lower costs and updating fraud prevention measures. Malhotra also praised efforts on re-KYC initiatives and unclaimed deposits, encouraging banks to prioritize customer service and proactive outreach through awareness campaigns.

(With inputs from agencies.)