Reserve Bank of India (RBI) Governor Shakti Kant Das has announced that commercial banks are now fully autonomous in setting their deposit and loan interest rates, following the removal of previous interest rate controls. This change, discussed during a press conference with Finance Minister Nirmala Sitharaman, allows each bank to independently determine its rates while ensuring that loan-to-deposit ratios will be closely monitored for any discrepancies.
Finance Minister Sitharaman urged banks to focus on their core functions of mobilizing deposits and disbursing loans, expressing concern over the slowdown in investment mobilization. She noted that domestic investors are achieving strong returns in sectors like the stock market and encouraged banks to attract individual investments by offering innovative and appealing financial products.
In related developments, despite the RBI maintaining the key interest rate steady for the ninth consecutive time, some public sector banks, including Bank of Baroda, UCO Bank, and Canara Bank, have increased their loan interest rates by 0.05%. This adjustment reflects the current marginal cost of funds-based lending rate.
