The Reserve Bank of India on Tuesday pressed banks to fully transmit policy rate cuts to borrowers, as Governor Sanjay Malhotra urged lenders to support sustainable growth and improve customer outcomes, PTI reported.
Malhotra met managing directors and chief executives of public sector banks and select private lenders in Mumbai, asking them to pass on the benefit of rate cuts to customers. Since February 2025, the RBI has reduced the key policy rate by 125 basis points to 5.25 per cent, amid India recording 8 per cent GDP growth in the first half of the current financial year.
In a statement, the central bank said the Governor observed steady improvement in the health and operations of the banking sector in 2025, but cautioned banks against complacency, urging them to remain vigilant in an evolving environment.
He noted that the cumulative 125 basis points easing, along with increased use of technology, should lead to lower intermediation costs and higher efficiency, supporting sustainable growth and deeper financial inclusion. Stressing the need for better customer service, Malhotra asked banks to reduce grievances and strengthen internal systems.
The Governor also flagged rising risks from digital fraud and called for stronger, intelligence-driven safeguards. While appreciating banks’ efforts on re-KYC and unclaimed deposits, he encouraged proactive outreach and sustained awareness campaigns.
Malhotra reaffirmed the RBI’s consultative approach, citing recent initiatives aimed at consolidating and simplifying regulations. The meeting was attended by Deputy Governors T Rabi Sankar, Swaminathan J, Poonam Gupta and S C Murmu, along with executive directors handling supervision, regulation, enforcement, and consumer education and financial inclusion.
The RBI said such interactions are part of its ongoing engagement with senior management of regulated entities, with the previous meeting held on January 27, 2025.
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