Banks not passing on RBI policy rate benefits: Congress in RS

NEW DELHI: A Congress member in Rajya Sabha today said the banks were doing "injustice" to their customers by not passing the entire reduction in key policy rate by the RBI to their customers and sought steps to ensure it.

Raising the issue during the Zero Hour, Congress member Palvai Govardhan Reddy said the RBI has reduced the repo rate by 150 basis, but banks have only passed on the benefit to the consumers in the range of 60-70 basis points.

"Banks are not passing on the benefits...(then) what is the point of reducing repo rate," he said, adding that the banks by not passing on the reduced rates are doing "injustice" to the borrowers.

On the contrary, the Congress member said the banks were quick to raise interest rates as soon as the RBI increased the key policy rate or repo rate (short term lending rate).

He urged the RBI and the Finance Minister to look into the issue and ensure that entire rate cut is passed on to the customers, so that home and auto loans could get cheaper.