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Mains issueGS-3News & Analysis23 June 2026

Rate cuts transmission moderated in May 2026: RBI

Source: thehindu.comOriginal report

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Why now

01

The Reserve Bank of India's (RBI) May 2026 bulletin highlighted that the transmission of recent rate cuts (March-April 2026) was uneven across sectors. It noted that private sector banks exhibited more pronounced pass-through to lending rates, while public sector banks showed stronger transmission to deposit rates. The report also indicated that credit growth continued to outpace deposit growth, a trend widening since August 2025.

Core issue

02

The Reserve Bank of India's (RBI) May 2026 bulletin highlighted that the transmission of recent rate cuts (March-April 2026) was uneven across sectors. It noted that private sector banks exhibited more pronounced pass-through to lending rates, while public sector banks showed stronger transmission to deposit rates. The report also indicated that credit growth continued to outpace deposit growth, a trend widening since August 2025.

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