SECTIONS
Borrowing from money market cheaper than bank loan: DBS Report
By
Sangita Mehta
, ET Bureau
Synopsis
Money market players have passed on the benefit of the policy rate cut by 100 basis points to borrowers as against which have transmitted just about 70 basis points, following a reduction of 125 bps in policy rates by Reserve Bank of India (RBI) since January 2015.
![Borrowing from money market cheaper than bank loan: DBS Report (1) Borrowing from money market cheaper than bank loan: DBS Report (1)](https://i0.wp.com/img.etimg.com/thumb/msid-49598657,width-300,height-225,imgsize-91267,resizemode-75/.jpg)
MUMBAI: Money market players have passed on the benefit of the policy rate cut by 100 basis points to borrowers as against which have transmitted just about 70 basis points, following a reduction of 125 bps in policy rates by Reserve Bank of India (RBI) since January 2015. This was pointed out in a report prepared by DBS research report which added that 'financing cost has not reduced significantly.' This in effect means that a borrower with investment grade rating can raise funds at a cheaper cost by issuing bonds than by taking loan.
However, it noted that " The recent bunched-up rate cut, regular moral suasion and proposed regulatory changes to calculate lending rates are expected to improve the sensitivity of retail rates to policy changes in the coming months."
The RBI governor Raghuram Rajan said in the past that "Transmission of policy rates to lending rates has not taken place so far despite weak credit off take."
The report also pointed out that the restructured and non-performing loans, banks’ overall stressed advances jumped to over 11% of total advances by mid-2015.
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News on
RBIreserve bank of indiaRaghuram Rajan
(Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
...moreless
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News on
RBIreserve bank of indiaRaghuram Rajan
(Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
...moreless
Prime ExclusivesInvestment IdeasStock Report PlusePaperWealth Edition
From Leh to Varanasi, via Vikhroli: Sister takes Pepperfry’s Ambareesh Murty on his final journey
The physical retail store is not dying, rather rocking!
Blinkit, Zepto made quick commerce a new normal in metros. Same day delivery up next?
Stock Radar: Should you bet on HCL Technologies despite its recent fall?
U-turn: Why Centre’s decision to revoke some requirements in AI models’ advisory raises questions.
In smallcaps there is 'market risk' and 'unnecessary self-created anxiety risk': Check critical things to avoid the latter
- 1
- 2
- 3
View all Stories
Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories
& personalised newsletters
Login Now
Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &
in-depth stock reports
Subscribe Now
ET
Uh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
Prime Account Detected!
It seems like you're already an ETPrime member with
Login using your ET Prime credentials to enjoy all member benefits
Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.
To read full story, subscribe to ET Prime
Get Unlimited Access to The Economic Times
₹34 per week
Billed annually at ₹2499 ₹1749
Already a Member? Sign In now
Super Saver Sale - Flat 30% Off
On ET Prime Membership
Claim Offer »
Already a Member? Sign In now
Sign in to read the full article
You’ve got this Prime Story as a Free Gift
Rs 49 for 1st month
Then Rs. 1,749 per year
SUBSCRIBE NOW
Valid only with UPI, Credit & Debit Cards Autopay
Choose Payment Mode & Plan
-
-
-
You can cancel your subscription anytime
-
-
-
Netbanking, Credit & Debit Card
Subscribe with Google
₹399/month
Monthly PLAN
Billed Amount ₹399
No Trial Period
₹208/month
(Save 49%)
Yearly PLAN
Billed Amount ₹2,499
15 Days Trial +Includes DocuBay and TimesPrime Membership.
₹150/month
(Save 63%)
2-Year PLAN
Billed Amount ₹3,599
15 Days Trial +Includes DocuBay and TimesPrime Membership.
Quarterly
$13.99
7 Days Trial
Yearly
(Save 40.0%)
$33.99
15 Days Trial
Get ET Prime for just ₹2499 ₹1749/yr
Offer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail Offer
Offer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail Offer
Offer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail Offer
Offer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail Offer
Offer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail Offer
Holi Offer on ETPrime
Get flat 20% off
Avail Offer
Avail Offer
To Read the full Story, Subscribe to ET Prime
Sign in to read the full article
You’ve got this Prime Story as a Free Gift
Access the exclusive Economic Times stories, Editorial and Expert opinion
Unlock this story and enjoy all members-only benefits.
- 8 insight-rich stories published daily
- 4000+ in-depth Stock Reports
- Print Edition, the digital Newspaper
- 2 Stock Researches everyday
Offer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail Offer
Offer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail Offer
Offer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail Offer
Offer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail Offer
Offer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail Offer
Holi Offer on ETPrime
Get flat 20% off
Avail Offer
Avail Offer
'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '
' + h3 + '
' + h4 + '
- ' + listing + '
'; $('#paidSCWidget').html(html); var callback = $('#paidSCWidget').attr('data-callback'); if(callback && window[callback]) { window[callback](); } customDimension.dimension72 += ' | Shown SYFT no Trial_With Missed Paywalled Articles Collection'; } else { _processNormal() } } }); } else { _processNormal(); } } catch (e) { _processNormal(); } }, function () { _processNormal(); }); //console.log('storyCollectionLoad', $); }
Why ?
Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors
Stock analysis. Market Research. Industry Trends on 4000+ Stocks
Clean experience with
Minimal AdsComment & Engage with ET Prime community Exclusive invites to Virtual Events with Industry Leaders A trusted team of Journalists & Analysts who can best filter signal from noise Get 1 Year Complimentary Subscription of TOI+ worth Rs.799/-