http://www.thehindubusinessline.com/industry-and-economy/banking/article3731292.ece
Quarterly GDP growth slided all through the four quarters of 2011-12 to touch a nine-year low of 5.3 per cent in the January-March quarter. The growth concerns prompted the RBI to reduce the benchmark repo rate by 50 basis points in its Annual Policy statement on April 17, 2012.
The transmission of the reduction in policy rates to the deposit and lending rates, however, was asymmetric. While modal base rate of commercial banks declined by 25 bps, the modal deposit rate declined by only 2 bps in the June quarter.
The stickiness in deposit rates reflects interplay of factors such as tight liquidity and high inflation in Q1 of 2012-13.
It may be noted that growth in both deposits and advances for the banking system at 13.4 per cent and 16.5 per cent in Q1 has been below the RBI’s indicative projection of 16 per cent and 17 per cent, respectively, for 2012-13.
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