New Delhi, Feb 10: The Reserve Bank of India (RBI) has asked the commercial banks to explain why the benefits of lower interest rate have not peculated to home loan customers despite the cut in repo and reverse repo rates.
Speaking for the people, who are struggling to pay the high interest rates, the central bank on Wednesday, Feb 10 sent a letter to the Indian Banks' Association (IBA) seeking higher transparency of home loan rates.
RBI, which wants to know if the banks are violating norms by discriminating between old and new customers, has also threatened action against the bank if its letter doesn't get a reply.
The banks are reportedly not giving the benefits to the old customers.
Besides, the RBI cut reverse and repo rates thrice during the first three months of 2009 so that the bank could cut down the lending rates to help the customers.
These factors prompted the banking regulator to take this step.