The Reserve Bank of India’s 25-basis-point repo rate hike on Wednesday may take time to fully transmit to lending and deposit rates, as abundant liquidity leaves banks with little incentive to raise funding costs, experts said. “Transmission will likely be slower, except for loans directly linked to the external benchmark lending rate (EBLR), which must adjust faster. Given the surplus liquidity in the system, the weighted average call rate (WACR) remains relatively low, so transmission will remain muted until liquidity gets deployed or the RBI steps up its liquidity mop-up,” said Sachin Sachdeva, vice-president and co-group head, financial sector ratings, ICRA.