By-George Alexander Muthoot, MD, Muthoot Finance
“The Reserve Bank of India’s decision to cut the repo rate by 50 basis points to 5.50% reflects a decisive intent to boost economic momentum and improve systemic liquidity. While the immediate impact can be seen in softening of lending rates and improved access to credit, the larger opportunity lies in translating this into long-term financial inclusion and demand-led recovery.
For NBFCs, this is an encouraging move as it creates a favourable environment by lowering borrowing costs and extending affordable credit to underserved communities. The move, coupled with a lowered inflation outlook, is likely to support domestic consumption and stimulate credit demand, in the coming quarters. Overall, we view this as a timely and positive intervention that can support a stronger credit cycle in FY26.”