Mumbai, Feb. 14 -- The recent policy rate cut by India's central bank should turn out to be good news for individuals and small businesses. However, large corporates hoping for some succour on interest payments will have to hold the bubbly as banks dither on cutting lending rates for such borrowers, and wait for a key internal committee to take a call.

The development comes on the back of the first repo rate cut this month by the Reserve Bank of India (RBI) in five years-of 25 basis points (bps)-and the central government's reported hawk-eye on banks to follow suit on their own lending rates. (One bps is one-hundredth of a percentage point.)

One big reason for the hesitation to cut deposit rates (a precursor to a lending rate cut) is th...