Congress Leader Vishwas Utagi Criticizes RBI’s Repo Rate Cut, Calls for Depositor Protection

Mumbai: Congress leader and banking sector expert Vishwas Utagi has strongly criticised the Reserve Bank of India’s (RBI) latest monetary policy decision, warning that the reduction in repo rate would adversely impact depositors, especially middle-class savers and retirees.

Speaking at a press conference in Mumbai, Utagi said, “On June 6, the RBI reduced the repo rate from 6% to 5.5%, a steep cut of 0.5%. While many experts expected a modest cut of 0.25%, the RBI has taken an aggressive step to push credit growth. But this will come at the cost of depositors.”

He pointed out that while India’s GDP growth is currently at 6.5% and inflation is projected to remain under 4%, the decision to slash rates would further reduce interest on deposits. “The RBI has also announced that the Cash Reserve Ratio (CRR) will be lowered from 4% to 3% in phases by December, which will release ₹2.5 lakh crore into the banking system. This move will make loans cheaper for housing, vehicles, education, and businesses — but banks will simultaneously cut deposit rates,” he said.

Utagi expressed concern that such policies neglect the plight of senior citizens and small savers. “The common depositor is being punished repeatedly. The purchasing power of depositors is already under stress due to inflation. Falling interest rates are weakening their financial stability. This is especially unfair to retirees who depend solely on interest income,” he added.

Quoting RBI data, he highlighted that total deposits in the banking system stood at ₹234.5 lakh crore as of March 2025, with only 7% growth — a clear sign that savings are not increasing significantly. “Depositors from rural, semi-urban, and urban areas form the backbone of our banking system. Yet, where is their protection?” Utagi questioned.

He further slammed the government and the banking system for favouring large corporate borrowers, saying, “Lakhs of crores of bad loans have been written off in recent years. This is nothing but a clean-up of balance sheets at the expense of ordinary account holders.”

Listing recent interest rate cuts by major banks — including the Central Bank of India, Bank of Maharashtra, Federal Bank, and IndusInd Bank — Utagi said depositors are being systematically sidelined. “We are asking very clear questions. Where is the protection for depositors? Why is the government soft on loan defaulters? Why is job creation stagnant despite all claims of economic revival?”

He demanded that the RBI and the Central Government immediately address the issue and institute robust mechanisms for depositor protection. “Why should those who carry the nation on their shoulders also bear its burdens alone?” Utagi concluded.