Transmission of the 50 basis points (bps) rate cut between March and April 2026 , was uneven across sectors, according to Reserve Bank of India’s (RBI) bulletin released on Monday (June 22, 2026).

Transmission of rate cuts to both fresh and outstanding loans has been uneven, the banking regulator observed.

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

The effect on the customers however were not commensurate. Lending and deposit rates hardened. “Transmission to the lending rates fresh and outstanding loans have remained uneven across sectors. During the current easing cycle, the pass-through to lending rates was more pronounced in private sector banks, while public sector banks exhibited relatively stronger transmission to deposit rates,” RBI said in the bulletin. 

In the times when RBI increased rates, weighted average deposit rates increased 259 basis points, more than the repo rate increase of 250 points in the period. During the easing cycle however, WADR on fresh deposits dipped just 85 bps as opposed to the 125 bps between Feb 2025 to April 2026. 

For outstanding deposits, the transmission was even moderated, with 206 bps during rate hikes and 50 bps during rate cuts. 

In terms of loans, weighted average lending rates overall increased 182 bps during rate hikes and dipped 83 bps in easing cycle.

Overall, continued to grow at a rate faster than deposits. Credit grew at a rate of 17.7% and deposits at just 12.2% in May 2026. The wedge has been widening since August 2025.