India banks not paring rates despite central bank easing

Mumbai

INDIA's largest lenders aren't passing on two rounds of monetary easing to borrowers as profitability slides and bad loans surge.

State Bank of India and Bank of Baroda are among 43 of 47 lenders yet to lower base lending rates after the Reserve Bank of India cut its benchmark rate by 50 basis points to 7.5 per cent in two moves this year.

The three-month interbank rate has fallen only seven basis points to 8.58 per cent in 2015. A similar gauge of funding costs in China is at 4.9 per cent.

"So far, the drop in cost of funds isn't enough to allow us to cut lending rates," Ranjan Dhawan, Bank of Baroda's Mumbai-based chief executive, said in a March 12 interview…