RBI study finds banks pass on rate hikes faster than rate cuts

A Reserve Bank of India study has found that lenders respond more quickly to increases in the repo rate than to reductions. Banks passed on 76.4% of repo rate hikes to borrowers, compared with only 64% of rate cuts. Lending rates rose sharply during tightening phases but fell only marginally during easing cycles. The findings point to asymmetric transmission of monetary policy, a pattern with notable implications for MSMEs.