New Delhi, Dec. 3 -- India's state-owned banks have raised concerns with the Reserve Bank of India (RBI) about the weaker transmission of rate cuts to deposits, with lending rates falling significantly faster and straining their balance sheets, according to three people familiar with the discussions.

In a meeting with RBI officials about 10 days ago, ahead of the monetary policy outcome on 5 December, multiple state-owned bank chiefs raised concerns that the dominance of external benchmark-linked loans has ensured instant repricing of assets whenever the repo rate moves, said the three people cited earlier.

In contrast, only fresh deposits are repriced, and at a much slower and costlier pace, said the people, who didn't want to be ident...