Rate cuts transmission moderated in May 2026: RBI

📌 Summary:

• The RBI's bulletin (released June 22, 2026) found that transmission of the 50 basis-points (bps) rate cut effected between March and April 2026 was uneven across sectors
• Pass-through of the rate cut to both fresh and outstanding loans has been uneven, the banking regulator observed
• This signals that monetary-policy easing is not fully reaching borrowers, with implications for credit growth, investment and consumption

🎯 UPSC Relevance: GS3 Economy — monetary policy, RBI's role, and the interest-rate transmission mechanism

📝 Prelims Facts:

• A 50 bps repo-rate cut was effected between March and April 2026
• Monetary transmission is tracked via the RBI bulletin
• 100 basis points = 1 percentage point

🔑 Key Term: Monetary Policy Transmission — the process by which changes in the RBI's policy (repo) rate pass through to banks' lending and deposit rates and the wider economy