The government is keeping a close watch on rate cut transmissions by public sector banks (PSB), reported Business Standard, adding that the Ministry of Finance is gathering data on lending rate cuts effected by the lenders following a series of rate cuts by the RBI.

The development, according to the sources mentioned in the report, comes after concerns related to slower monetary rate transmission were raised in the 20th meeting of the Financial Stability and Development Council.

Following the meeting chaired by finance minister Nirmala Sitharaman, the report said, Department of Financial Services began collecting data on interest rate cuts.

“The finance ministry and the RBI want a faster transmission of interest rates,” a bank executive was quoted as saying in the report.

There have been concerns about the slow transmission of rate cuts among various financial circles. Earlier, RBI governor Shaktikanta Das had expressed concerns over the matter while announcing a 25-basis points repo rate cut on June 6.

After pointing about the fact that 50-basis points reduction in the policy repo rate in February and April 2019 had led to only a 21-basis points reduction in lending rates, the RBI head had stated that the apex bank expected a faster transmission in the future, the report added.