New Delhi: Public sector banks seem to be in no hurry to follow big brother SBI in linking their deposit and lending rates to the RBI’s repo rate. This may further irk the Reserve Bank of India for not transmitting the lower interest rates to the customers. While some of them do admit that ultimately linking to repo rate might happen but they are not firm on the time of such commitment. Also, several PSU banks have not responded when asked if they planned to go for the external benchmark linking with repo rate.
A Punjab National Bank source told IANS: “No decision has been taken, but bank will take a call soon. Other banks have to follow suit sooner or later.” RBI Governor Shaktikanta Das in February met the top lenders asking them to pass on the benefit of repo rate cut to the customers after it had reduced its repo rate by 25 basis points to 6.25 per cent. Many bankers said the mismatch between deposits and credit growth and competition from the government is one of the reasons raising their cost of capital.