According to the Reserve Bank of India (RBI) bulletin released on Monday (June 22, 2026), the transmission of the 50 basis point (bps) rate cut between March and April 2026 was uneven across sectors. The banking regulator observed that the transmission of rate cuts on both new and outstanding loans has been uneven.

Between May 2022 and January 2025, RBI increased the repo rate by 250 bps. Between February 2025 and April 2026, the repo rate was reduced by 85 basis points. A basis point is 1/100th of a percentage.

However the impact on customers was not commensurate. Lending and deposit rates were tightened.

“The transmission in lending rates of new and outstanding loans remains uneven across sectors. During the current easing cycle, the movement in lending rates was more pronounced in private sector banks, while public sector banks displayed relatively stronger transmission in deposit rates,” the RBI said in the bulletin.

During times when the RBI increased rates, weighted average deposit rates increased by 259 basis points, which is more than the 250 basis point increase in the repo rate in that period. However, during the easing cycle, the WADR on fresh deposits declined by only 85 bps compared to 125 bps between February 2025 and April 2026. For outstanding deposits, transmission was also controlled with 206 bps during rate increases and 50 bps during rate cuts.

In terms of loans, weighted average lending rates overall increased by 182 bps during the rate hike and declined by 83 bps during the easing cycle. Overall, deposits continued to grow at a faster rate than deposits. Credit grew at 17.

7% and deposits only at 12. 2% in May 2026. This limit is being widened from August 2025.