The transmission of the Reserve Bank of India’s cumulative 125-basis-point repo rate cut between February 2025 and March 2026 has remained uneven across banks and non-bank lenders, according to the RBI’s annual report. Overall, lending rates on outstanding rupee loans of scheduled commercial banks declined by 88 basis points during the period. In contrast, lending rates on outstanding rupee loans extended by non-banking financial companies (NBFCs) fell by only 16 basis points. “Lending rates of NBFCs are typically higher than those of banks due to differences in funding structures and borrower risk profiles. Consequently, the extent of monetary policy transmission differs between NBFCs and SCBs,” the RBI said in the report.