Mumbai, March 23 According to the Reserve Bank of India's bulletin released on Monday, foreign banks have experienced a higher transmission of monetary easing in both fresh and outstanding deposit and lending rates compared to their domestic counterparts.
The data in the bulletin showed that foreign banks saw a 1.06 per cent monetary transmission on outstanding deposits between February 2025 and January 2026, compared to 0.43 per cent for domestic private banks and 0.41 per cent for public sector banks.
For fresh deposits, foreign banks saw a 1.10 per cent monetary transmission, compared to 0.87 per cent and 0.88 per cent for private banks and public sector banks, respectively, according to the bulletin.
On the lending side, foreign banks also outperformed their peers in terms of transmission, with a 1.11 per cent transmission on outstanding rupee loans, compared to 0.88 per cent for private banks and 0.76 per cent for public sector banks.
In the August, October, and February 2026 monetary policies, the central bank maintained the rate unchanged.
During the current easing cycle from February 2025 to January 2026, the weighted average lending rates of scheduled commercial banks (SCBs) on both fresh and outstanding rupee loans decreased by 0.66 per cent and 0.83 per cent, respectively, the RBI bulletin said.
On the deposit side, interest rates on fresh term deposits have also fallen; however, the pass-through to interest rates on outstanding deposits has been moderate.
As of February 28, the total outstanding credit to the commercial sector rose by 14.7 per cent, with non-bank sources registering a growth of 15.6 per cent.
In January 2026, non-food bank credit growth was well spread out across sectors, though some easing has been observed in agriculture and industry.
Within industries, lending to micro, small and medium enterprises (MSMEs) continued to improve. The services sector credit growth sustained its momentum, driven by robust bank lending to NBFCs and commercial real estate, despite a moderation in credit growth to trade and professional services segments.
The growth in personal loans was led by housing, gold, and vehicle segments, the RBI bulletin said.
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