With most banks yet to pass on the benefit of lower interest rates to consumers following the rate cut last month, RBI Governor Raghuram Rajan on Tuesday said the central bank cannot ask them to lower the rates, but eventually competition will force them to do so.
“I think it is the pressure of the competition which will eventually force banks to pass through these rate cuts. So let us wait and see. It is not regulatory intervention...It’s competition (that will force lenders to lower rates),” Rajan told reporters at the customary post-policy press briefing.