India cenbank nudges reluctant lenders to raise savings deposit rates

India's central bank is keen that banks pass on the benefits of higher interest rates to account holders by raising the rates they offer on savings' deposits, but lenders are pushing back in a bid to bolster margins, several banking sources said. Savings accounts are low interest rate-bearing deposits offered by Indian banks, forming a third of their total deposits. The Reserve Bank of India (RBI), which has increased the policy repo rate by 250 basis points to 6.50% in the last fiscal year, wants to ensure a more complete transmission of monetary policy, a source familiar with the central bank's thinking said.