The Reserve Bank of India talks about the factors that hinder monetary transmission
The Reserve Bank Of India said that although deposit transmission and lending rates have significantly improved, several factors continue to hinder effective monetary transmission to bank rates. 
The Reserve Bank Of India has made several attempts to improvise the monetary transmission by refining the interest rates set by these banks, the central bank’s bulletin for July 2021 noted.
The mismatch of banks’ assets and liabilities, competitive pressure for small saving schemes and asset quality for scheduled commercial banks are some factors. Factors like the heterogeneous pricing methodology of NBFCs and Internal benchmark for pricing loans also hinder monetary transmission.
The monetary transmission in the current easing cycle has been complete across the money market segments and corporate bond market so far, the bulletin said.
In regards to the cumulative reduction policy of repo rate by 250 basis pts, the lending rates of SCB of one-year marginal cost declined by 155bps from February 2019 to June 2021.
