World Economy

Indian Banks Reject Monetary Easing

Indian Banks Reject Monetary EasingIndian Banks Reject Monetary Easing

India’s largest lenders aren’t passing on two rounds of monetary easing to borrowers as profitability slides and bad loans surge, Bloomberg reported. State Bank of India and Bank of Baroda are among 43 of 47 lenders yet to lower base lending rates after the Reserve Bank of India cut its benchmark rate by 50 basis points to 7.5 percent in two moves this year. The three-month interbank rate has fallen only seven basis points to 8.58% in 2015. Central Bank Governor Raghuram Rajan said in his March 4 policy statement that further monetary easing will need prerequisites including “the pass-through of past rate cuts into lending rates.”