Top bankers are expecting faster transmission of the benefits of the interest rate reduction by the RBI to their customers as banks have already introduced repo-linked retail and MSME products and launched new packages to boost credit growth in the festive season. Rajnish Kumar, Chairman, SBI, said, The 25-basis point rate cut coupled with an explicit policy acknowledgement of further rate cuts would ensure that fiscal and monetary policy work in tandem in arresting growth concerns. Padmaja Chunduru, MD & CEO of Indian Bank, said, The RBI continued its accommodative stance and both the fiscal and monetary policies are moving in tandem to spur/ revive growth in the economy. With inflation being within the target, the forward guidance remains accommodative to revive growth. We believe the transmission of monetary policy rate changes will be faster now that banks have already introduced repo-linked retail and MSE products and the rate cuts will be passed on to these borrowers. With the busy and festive season having started, this rate cut will boost market sentiments. Mrutyunjay Mahapatra, MD & CEO of Syndicate Bank, said, The RBI has continued its accommodative stance on monetary policy and interest rates. With this, the banking sector, which has moved from MCLR to external benchmark loan rate, shall pass on the 25 bps reduction to the ultimate consumers faster than in the past. Combined with fiscal stimulus like tax rate cuts and investment incentivisation, the sentiments and the overall economic outlook is expected to be much better. The reiteration of the health of the financial system and the isolation of the recent events will go a long way for consumer confidence building . V G Kannan, Chief Executive, Indian Banks Association, said, the monetary transmission could be swifter if banks could make similar changes in the deposits. From the liquidity perspective, the system is adequately liquid and RBI has given the assurance to maintain sufficient liquidity in the system. With liquidity and improved domestic demand due to the measures proposed by the government, the banks could expect robust credit pick up in the second half of the fiscal. Overall, we expect the demand to improve and the main challenge now is to revive consumption-led recovery and spur private investments post tax corporate rate cuts, Chunduru said. Zarin Daruwala, CEO, Standard Chartered Bank, said, the RBI reaffirmed its strong commitment to India s growth by cutting the repo rate by 25 bps and continuing with its accommodative stance. The cumulative reduction of 135 bps in repo rate delivered so far in 2019, along with the recent cut in corporate tax should help revive growth in the coming months. Stepping up its initiative to speed up transmission of rate reduction benefits to customers, RBI last month made it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs (micro, small and medium enterprises) to an external benchmark like repo rate effective October 1, 2019. Banks have already announced their plan to link their loans to repo rate. The transmission of policy rate changes to the lending rate of banks under the current MCLR (marginal cost-based lending rate) framework has not been satisfactory, the RBI said.