Bank deposits show slow response to repo rate cuts
RBI data shows bank deposits have only adjusted 34% to repo rate cuts, with term deposit rates down 42 bps despite a 125 bps reduction. This indicates banks' reluctance to lower rates sharply, impacting deposit mobilization strategies.
pre-market1 source ↓written by the desknot a recommendation
- deposits is only
- 34%
- in the repo
- 125-bps cut
- fell by just
- 42 bps
Data from the Reserve Bank of India indicates that the pass-through of repo rate cuts to outstanding deposits is only 34%. Despite a 125-bps cut in the repo rate, term deposit rates fell by just 42 bps. This modest transmission suggests banks are cautious about lowering existing deposit rates, fearing customer migration to alternative investments. 📉
Not investment advice. For informational purposes only.