Page 156 - economic_survey_2021-2022

130 Economic Survey 2021-22

Table 4: Transmission from Repo Rate to Deposit and Lending Rates of SCBs
(Variation in basis points)
Term Deposit Rates Lending Rates

Repo Median WADTDR – 1-Year WALR – WALR –
Period
rate TDR – Fresh Outstanding Median Outstanding Fresh rupee
deposits deposits MCLR rupee loans loans

April 2021-
November 2021 0 -1 -24 -10 -19 6
February 2019 -
November 2021 -250 -213 -187 -155 -133 -197

Source: RBI
Note: WALR: Weighted Average Lending Rate. WADTDR: Weighted Average Domestic Term Deposit Rate;
MCLR: Marginal Cost of Funds based Lending Rate. TDR: Term Deposit Rate.
4.25 The transmission has been slightly higher in public sector banks than private sector banks
in the overall current monetary easing cycle, though it was higher for private banks in April-
November 2021. The WALR on outstanding rupee loans fell by 135 bps for public sector banks
and 123 bps for private banks, while the WALR on fresh rupee loans fell by 210 bps for public
sector banks and 177 bps for private sector banks during February 2019- November 2021(Table
5). During April-November 2021, WALR on outstanding rupee loans reduced by 12 bps for
public sector banks and 31 bps for private banks, whereas the WALR on fresh loans increased
by 8 bps for public sector banks.

Table 5: Transmission across Bank Groups (Variation in basis points)
February 2019 - November 2021 April 2021- November 2021
WALR – WALR WADTDR – WALR – WALR – WADTDR
Outstand-
ing rupee – Fresh Outstanding Outstanding Fresh rupee – Outstand-
loans rupee loans deposits rupee loans loans ing deposits
Public sector
banks -135 -210 -168 -12 8 -21
Private -123 -177 -203 -31 -15 -32
banks
SCBs # -133 -197 -187 -19 6 -24
Source: RBI
# SCBs include public, private and foreign banks

Box 2: DEPOSIT INSURANCE IN INDIA

The Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, passed by the
Parliament in 2021, made significant changes in the landscape of deposit insurance in India. The
functions of the Deposit Insurance and Credit Guarantee Corporation (DICGC) are governed
by the provisions of the DICGC Act, 1961 and the DICGC General Regulations, 1961. Under
the Act, the Corporation is liable to pay the insured deposit amount to depositors of an