RBI cut interest rates sharply in 2020 in response to the Covid Pandemic. It cut the policy repo rate by 115bps and the reverse repo rate by 155bps. And in addition it flooded the money markets with liquidity.

In response Banks have cut lending rates too. Average Interest rate on all outstanding loans fell by ~90bps in CY2020. But not all categories of borrowers benefitted equally.

Ironically, it is the financial sector that has benefitted the most. Average lending rate on loans to Financial sector (other Banks, NBFCs etc) declined 140bps in CY2020. Housing loan borrowers and Wholesale & Retail trade borrowers also saw higher than average benefit with lending rate declining 110bps.

At the other end of the spectrum, Agriculture and Transport Operators benefitted the least with interest rates on loans for these sectors falling just 50bps.