RBI doesn't meddle in everyday running of banks, says Rajan

 RBI Governor Raghuram Rajan said that the central bank cannot nudge banks to pass on rate cuts to consumers.

“RBI is not in any way involved in the day-to-day running of banks, that decision is taken by the owners and the management. So we cannot nudge them.

We can only comment on the fact that despite the fall in long term interest rates and a fall in treasury rates over the last one and half years, bank lending rates have remained flat over this period,” Rajan said.

The Governor was also hopeful that the transmission by banks to consumers will take place soon.

“There has been some adjustment in rates on new loans made by banks but in general base rates have not changed,” Rajan said.

“When you talk to banks, they are happy when we cut rates. At some point, my guess is that this transmission has to take place, so we will have to look at that also,” he added.