Repo rate does not immediately translate into lending rate cuts: SBI

Diwakar Gupta, the MD and CFO at State Bank of India, speaks to NDTV after the RBI announced a 25 bps cut in repo rate in its credit policy review. Mr Gupta says that a cut in repo rate does not immediately translate into a cut in lending rates by banks, as it makes no significant difference or additional numbers in the bank's earnings and revenues. "Repo rate can affect banks' profitability in medium term, but that comes with a lag. A CRR cut, on the other hand, immediately releases cash which can be put to work…transmission is immediate," he says.