By–Lakshmanan V, GROUP PRESIDENT & HEAD – TREASURY (TREASURER), Federal Bank
“The higher than, expected 50 bp Repo cut, the 100 bps CRR cut trajectory and the change of stance to neutral, has given definitiveness to the Banking System on the monetary stance. The expectation is that the reduced rates and the promise of sufficient liquidity should facilitate faster transmission to the real economy. It is now to be seen how the Credit markets pick up and the demand offtake happens to ensure this transmission happens.”
By-Vinod Francis, General Manager, Chief Financial Officer, South Indian Bank
A Cut Above With a Focus on Growth, Liquidity
“The MPC’s decision to go for a deep cut in repo rate by 50 bps and slashing CRR to 3% in tranches will not only economic growth but also improve the liquidity positions of the banks significantly. These steps will ensure durability of the nascent resurgence in the domestic demand led by private spending. The MPC’s pivot to neutral stance and dovish economic commentary and inflation projection leave enough policy space for the central bank to manage the rate corridor in tune with the evolving trends on the price front. The key learning from the policy is that the central bank is not leaving any stones unturned to ensure price stability at the same time doing everything it takes to growth. With tariff uncertainty casting a long shadow over external demand (exports) RBI’s sharp focus on ing domestic demand and enhancing the lending power of the banking sector underpins its policy path during the current easing cycle by addressing key concerns on both demand and supply sides.”
K. Paul Thomas, MD & CEO, ESAF Small Finance Bank
“We view the MPC’s decision to cut the Cash Reserve Ratio to 3% in tranches and reduce the repo rate by 50 basis points as a timely opportunity to extend more affordable credit and further empower communities through inclusive banking. With system liquidity in surplus and funding costs expected to ease, especially in the overnight call money market, banks will benefit from enhanced lending capacity and reduced margin pressures. Additionally, with I forecasted at 3.7%, the resulting improvement in purchasing power, particularly among low-income groups, is likely to financial inclusion and stimulate broader economic participation.”
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