Banks pass on rate hikes, but go slow when rates fall; RBI study finds

MUMBAI: A study by RBI has found that interest rates adjust upward more completely during a tightening phase than they do downward during an easing phase.According to the study, published in RBI Bulletin, banks passed on 76.4% of the repo rate increase through contract repricing, with lending rates rising by 191 basis points following a 250-basis-point hike between March 2022 and Jan 2025.During the easing phase between Feb 2025 and March 2026, they passed on only 64% of the rate reduction, with lending rates