Rajan Can’t Convince Indian Banks to Cut Rates as Returns Shrink
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India’s largest lenders aren’t passing on two rounds of monetary easing to borrowers as profitability slides and bad loans surge.
State Bank of India and Bank of Baroda are among 43 of 47 lenders yet to lower base lending rates after the Reserve Bank of India cut its benchmark rate by 50 basis points to 7.5 percent in two moves this year. The three-month interbank rate has fallen only seven basis points to 8.58 percent in 2015. A similar gauge of funding costs in China is at 4.9 percent.