Banks to wait till Apr 7 before cutting rates: BoI

State-owned Bank of India on Wednesday said banks will wait till the next bi-monthly monetary policy review of the RBI on April 7 before cutting interest rates.

"Coming April after seeing RBI monetary policy statement, banks can start considering reduction in the rate... We can reduce anywhere from 10 basis points to 25 basis points," Bank of India Chairman V R Iyer said.

She was talking to reporters after a meeting between Finance Minister Arun Jaitley and heads of PSU banks and financial institutions.

The Reserve Bank has lowered interest rates by 0.50 per cent since January 2015, but banks are yet to pass on the benefit of rate cut to borrowers.

"The transmission will definitely take place... Banks also have to keep asset quality in mind (before passing on the benefit of rate cut). That is a guiding factor for any bank to reduce lending rate," Iyer said.

The RBI is scheduled to announce its bi-monthly policy review on April 7. In the meeting, the Finance Minister and officials from the Finance Ministry discussed the possibility of interest rate cut by banks.

"With respect to the rate cut we obviously had a discussion on RBI's actions... We tried to understand exactly how the banks are thinking about and the banks pointed out what they have already done," Minister of State for Finance Jayant Sinha said after the meeting.