While Reserve Bank of India's repo rate cut action since January failed to force a monetary transmission as banks kept lending rates unchanged, Governor Raghuram Rajan's stern message to bankers appears to have done the trick.

State Bank of IndiaBSE 0.72 % turned out to be the first lender to relent under pressure and lowered base rate, albeit by a token 15 basis points from 10% a year, signaling the beginning of monetary transmission as RBI desired. Other lenders such as HDFC BankBSE 0.12 % and ICICI BankBSE -0.33 % were quick to respond, lessening the burden of home loan takers and other borrowers.



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