The Reserve Bank of India-mandated external benchmarking regime introduced in October 2019 has facilitated the effective transmission of policy rate cuts. There has been a complete pass-through of repo rate reductions to fresh loans between October 2019 and May 2021, the central bank has said. All new retail and MSME floating-rate loans are now linked to an external benchmark, which is repo rate in the case of most banks. Interest rates have also dipped due to sizeable policy rate cuts since the beginning of the COVID-19 pandemic in India. RBI has slashed repo rate cumulatively by 115 basis points since March 2020. Easy liquidity conditions and other policy measures, too, contributed to softer rates.