Rajan doesn’t want to hear excuses on rate cuts, to take up liquidity issue with bankers

RBI Governor Raghuram Rajan has many times expressed displeasure over not passing on rate cuts to borrowers to which banks cite liquidity crunch as the reason.

To make sure banks follow the repo rate cuts, Rajan will be meeting the bankers to discuss the liquidity issue.

Rajan wants to make sure that banks implement 125 basis point rate cut.

While the RBI says it has sufficient cash in the system, banks have an opposite theory to tell.

Banks say they are forced to borrow an average of more than Rs 1.3 lakh crore from RBI to conduct day-to-day operations.

RBI has been persuading banks to clear bad loans, adding the banks should manage their positions better.

(Image: Indiatimes)