New Delhi, Sept. 30 -- "Invert, always invert," said legendary investor Charlie Munger. As the 'Dil maange more' chorus for a rate cut reaches a crescendo, what is top of mind for the policymakers is how to ensure transmission of rate impulses permeates through the system in a seamless and timely manner. For that, we need to invert! We should look at policy action not from the MPC framework and mandate point of view, but from how banks respond to policy rate cuts and see what impedes transmission and how to address them.

To understand the transmission dynamics, we need to acknowledge that transmission has been effective for a set of borrowers while some others have yet to gain in a similar manner. Large corporates, retail customers seeki...