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RBI Governor to meet PSB chiefs; rate transmission, coronavirus on agenda

According to senior public sector banks' (PSBs) executives, the bank chiefs customarily meet the RBI top brass immediately following the monetary policy review

twitter-logoBusinessToday.In | March 2, 2020 | Updated 10:59 IST
RBI Governor to meet PSB chiefs; rate transmission, coronavirus on agenda
RBI governor Shaktikanta Das will meet the chiefs of public sector banks (PSBs) on Monday to push for greater transmission of policy rates

Reserve Bank of India Governor Shaktikanta Das will hold a meeting with the heads of public sector banks on Monday to pore over the transmission of policy rates to end consumers.

Amongst the other likely issues to be discussed during the meet is how to deal with the impact of the coronavirus outbreak on the financial sector, according to a report in the Business Standard.

According to senior public sector banks' (PSBs) executives, the bank chiefs customarily meet the RBI top brass immediately following the monetary policy review.

Also Read: RBI Governor Shaktikanta Das asks PSBs to follow resolution framework, improve fraud risk management

One of the concerns that are expected to be addressed in the meeting is the extent of policy rate transfer to the end consumer after the Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.15% on February 6.

"The RBI would likely to hear us out on the progress being made in these areas. The assessment of the implications of the coronavirus outbreak may figure in our discussions," a senior PSB official told the news daily.

The RBI in its last monetary policy review (held between February 4-6), had introduced steps such as long-term repo operations (LTRO) and external benchmarking of new floating rate loans by banks to medium enterprises.

Also Read:RBI governor Shaktikanta Das calls for tighter governance at state-run banks

Since June 2019, the apex bank has been striving to ensure comfortable liquidity in the system to expedite the policy rates transmission and credit flow in the economy.

The central bank in its February policy review statement had also stated, "The monetary transmission across various money market segments and the private corporate bond market has been sizable. The RBI has cumulatively reduced the policy repo rate by 135 basis points since February 2019. And, the transmission until the end of January was 146 bps in the overnight call money market. The transmission has been of 190 bps for three-month commercial papers of non-banking finance companies."

Also Read:Transmission of policy rate cuts steadily improving: Shaktikanta Das

Also Read: Coronavirus outbreak to have limited impact on India: RBI Governor Shaktikanta Das

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