What can the RBI do to get banks to lower interest rates?

Having cut the repo rate by 125bp this year, the RBI has shifted its focus to ensuring that banks pass on these rate reductions to borrowers. In truth, high levels of bad debt mean that the banking system needs large-scale capital injections and arguably privatisation. The onus here lies with the government. But the RBI still has some other tools available to improve the monetary transmission mechanism. 

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