The past two years have seen RBI increase repo rates by 250 bps. Data on transmission across bank groups show that increase in lending rates was higher in the case of private banks than among public sector banks. However, in the case of deposits, transmission was higher for PSBs
In the sixth bi-monthly policy, the Reserve Bank of India (RBI) announced term repurchase agreements (repos) of one-year and three-year tenors of appropriate sizes for a total amount of Rs 1 lakh crore at the policy repo rate, from the fortnight beginning on February 15.
Gaurav Kapur of RBS believes the repo rate will be left unchanged after the 50 basis points cut over the past two-and-a-half months. Focus will be on RBI‘s assessment on inflation and growth, he says. He expects some steps on monetary transmission.
The bank's base rate currently stands at 10 per cent and the last movement in it was in November last year, when it was hiked by 0.20 per cent.