At present, the banks are slightly slow to change their interest rate in accordance with repo rate change by the RBI. COMMERCIAL banks are significantly depending upon the RBIs LAF repo to get short TERM funds. But they are reluctant to change their INDIVIDUAL lending rates and deposit rates with periodic changes in repo rate.

WHENEVER the RBI is changing the repo rate, it was verbally compelling banks to make changes in their lending rate. The purpose of changing the repo is realized only if the banks are changing their individual lending and deposit rates.

At present, the banks are slightly slow to change their interest rate in accordance with repo rate change by the RBI. Commercial banks are significantly depending upon the RBIs LAF repo to get short term funds. But they are reluctant to change their individual lending rates and deposit rates with periodic changes in repo rate.

Whenever the RBI is changing the repo rate, it was verbally compelling banks to make changes in their lending rate. The purpose of changing the repo is realized only if the banks are changing their individual lending and deposit rates.