Reserve Bank of India (RBI) Governor Sanjay Malhotra has urged Managing Directors and Chief Executive Officers of public and select private sector banks to reduce intermediation costs and improve operational efficiency, citing the 125 basis points (bps) policy rate reduction since February.
“The Governor noted that the 125 basis point easing, combined with greater use of technology, should translate into lower intermediation costs and higher efficiency, thereby supporting sustainable growth and deeper financial inclusion,” the RBI said in an official statement.
These interactions are part of the Reserve Bank’s ongoing engagement with senior management of regulated entities, following similar meetings held in January 2025.
The RBI Governor observed that while there has been steady improvement in the health and operations of the banking sector in 2025, banks must avoid complacency and remain vigilant in a dynamic environment.
Malhotra further urged banks to focus on reducing customer grievances and strengthening internal systems. Highlighting the growing risks of digital fraud, he called for more robust, intelligence-driven safeguards.
Appreciating banks’ efforts on re-KYC and unclaimed deposits, he encouraged proactive outreach and sustained awareness campaigns. He also reaffirmed the Reserve Bank’s consultative approach, referring to recent initiatives in consolidation and simplification of regulations, the statement said.
Participants shared their feedback and perspectives on a wide range of policy, supervisory, and operational matters, it added.
The interaction took place after the Monetary Policy Committee (MPC) lowered the benchmark repo rate by 25 basis points to 5.25 per cent, the lowest level in three years.
According to RBI’s monetary transmission data, banks’ weighted average domestic term deposit rates fell by 102 basis points between February and September, while interest rates on new rupee loans declined by 73 basis points.
In the December policy review, the RBI proposed launching a two-month campaign from January 1, 2026, to address all complaints pending with the RBI Ombudsman for more than a month.
-IANS
