Understandably, there are certain rigidities in the overall interest rate structure in the economy that constrain banks from reducing their lending rates. These have been well documented in the earlier monetary and credit policy statements of the RBI. Subsequently, interest rates on small savings have also moved down and there is a commitment from the Government to link these rates with market related rates.
The recovery environment has also improved. A related issue pertains to transparency in lending rates. Especially after the introduction of sub-PLR lending by banks, the spreads between the  BIS Review 1/2003  5  minimum and maximum lending rates seem to have widened. The RBI is making efforts to publish on its website bank-wise information on the minimum and maximum lending rates.