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The RBI Governor has given a clear message to the banks that the direct benefits of the cut in interest rates should reach the customers. Despite the reduction in repo rate by 1.25%, many banks have not yet made favorable changes in the loan rates, due to which resentment is increasing among the loan taking customers. Emphasizing on strong banking system, better customer service and digital security, RBI has reiterated the need for cautious and responsible banking.
Mumbai. The Reserve Bank of India (RBI) has given a clear message to the banking sector that now the time has come that the benefits of reduction in interest rates should reach the customers directly. Governor Sanjay Malhotra on Tuesday met top officials of public and private banks and stressed on making loans cheaper to accelerate sustainable economic growth. From February 2025 till now, the repo rate has been reduced by 1.25 percent and it has come down to 5.25 percent, but many banks are still not passing the relief further.
Emphasis on extending the benefits of interest rate reduction to customers
Governor Malhotra said that due to falling interest rates and increasing use of technology, the costs of banks are reducing, hence they should pass this benefit to the customers also. He clearly told the bank heads that cheap credit is essential to maintain economic growth. He also added that the health of the Indian banking sector has strengthened, but there is no scope for carelessness as the economic environment is constantly changing.
RBI’s strictness on customer service and security
Malhotra also stressed the need to improve customer service. He directed to reduce complaints, strengthen internal processes and provide timely solutions. He also expressed concern about the increase in cases of cyber fraud with the increase in digital transactions. The Governor gave a clear message to the banks that the security system should be very strong so that customer confidence is maintained and risks are reduced.
RBI praises again on KYC and unclaimed deposits
In the meeting, the Governor again praised the efforts of banks towards KYC campaign and activation of unclaimed accounts. He said that constant awareness and strategy of reaching out to customers is very important. Along with this, he also underlined the simplification and strengthening in recent rules, stating that RBI will work with an advisory approach in future also.
Top officials present in the meeting, keeping an eye on the next step
All four deputy governors and several executive directors were present in this high-level meeting. RBI said that this conversation is part of regular dialogue with the banking sector. The last meeting was held in January 2025, and this time too the focus was on strengthening the banking system. Now the market is keeping an eye on when the banks start giving real benefits to the customers by giving relief in interest rates.
