EconomyFriday, 3 July 2026·The Hindu - Economy
RBI says rate-cut transmission remained uneven in May 2026; credit growth at 17.7% outpaced deposits
RBI’s June 2026 bulletin said rate-cut transmission was uneven across sectors, while credit growth stayed ahead of deposits.
Key highlights
Direct fact
In a bulletin released on June 22, 2026, the RBI said transmission of the 50 basis points rate cut between March and April 2026 was uneven across sectors, even as credit growth in May 2026 stood at 17.7% against deposit growth of 12.2%.
Key specifics
- Between May 2022 and January 2025, the RBI increased the repo rate by 250 basis points.
- Between February 2025 and April 2026, the repo rate was reduced by 85 basis points.
- Weighted average deposit rates rose 259 basis points during the rate-hike cycle, more than the 250 bps repo increase.
- Weighted average lending rates increased 182 bps during the rate-hike cycle and fell 83 bps in the easing cycle.
- RBI said transmission to lending rates was more pronounced in private sector banks, while public sector banks showed stronger transmission to deposit rates.
Exam lens
Banking and monetary policy question type: repo rate, basis points, transmission, credit-deposit wedge; TNPSC may ask the meaning of 1 basis point and compare lending versus deposit rate pass-through.