Lenders’ Insights On RBI Measures

The moderation in unsecured lending growth highlights the sector's commitment to prudent financial practices

Dinesh Khara, Chairman, SBI

Rajiv Sabharwal, MD and CEO, Tata Capital

 George Alexander Muthoot, MD, Muthoot Finance 

FinTech BizNews Service 

Mumbai, June 7, 2024: Shaktikanta Das, Governor, the Reserve Bank of India, gave a statement today following MPC meeting. Decisions and Deliberations of the Monetary Policy Committee (MPC) have bearing upon various aspects of lending, investment, saving, digital & IT, Banking liquidity, FPIs inflows etc. Let’s know what are the views of experts from banks and NBFCs.

Rationalizing bulk deposit will facilitate better asset liability match for ASCBs

Dinesh Khara, Chairman, SBI: The RBI growth upgrade in policy reaffirmed India’s continued robust growth post pandemic. Domestic growth inflation outlook has moved favourably with inflation moving below 4% in Q2. The regulatory measures like setting up of “Digital Payments Intelligence platform” will harness advanced technologies to mitigate fraud risks. The measures to augment digital payments architecture are pro customer measures. Rationalizing the definition of bulk deposit from existing Rs 2 crores to Rs 3 crores will facilitate better asset liability match for ASCBs by reducing sensitivity to interest rate fluctuations.”

RBI underscores the resilience of the banking & NBFC sector

Jaykumar Shah, Chief Financial Officer, HDB Financial Services, a leading subsidiary of HDFC Bank: The RBI's decision to maintain interest rates at 6.5% underscores the resilience of the banking & NBFC sector, supported by strong asset quality. The moderation in unsecured lending growth highlights the sector's commitment to prudent financial practices. With projected GDP growth at 7.2% and an anticipated boost from a strong monsoon, the financial sector is poised for robust performance. The expected increase in Kharif production will significantly benefit rural economies, fostering inclusive growth.

As the sector emphasizes transparency and fairness in lending, it will empower individuals and businesses across both urban and rural areas. This aligns with the vision of an aspirational India, where sustainable and inclusive economic growth becomes the norm.”

Upward revision in Bulk Deposit threshold is pragmatic

Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank: In recent quarters, the Indian economy has acquired a distinct reputation for macro-financial stability. RBI’s 20 bps upward revision of FY25 GDP growth forecast to 7.2% along with retaining of CPI inflation forecast at 4.5% infuses confidence. In this backdrop, maintenance of monetary policy status quo by the RBI is a prudent decision as it bolsters effort towards preserving India’s macro-financial stability amidst global uncertainties.

Domestic growth momentum remains strong and prospects of a good monsoon outturn in 2024 should support rural economy. Along with the Government's commitment towards fiscal consolidation, this should create space for MPC to manage inflation growth dynamics. Upward revision in Bulk Deposit threshold from INR 2 crore to INR 3 crore & above is a welcome and pragmatic step and will provide more room to banks for mobilisation of granular retail deposits.”

Encouraging lower interest rates and increased investments

Rajiv Sabharwal, MD and CEO, Tata Capital: The first MPC post-election has instilled confidence and stability in the market. With steady repo rate at 6.5%, RBI is hinting towards balancing growth and inflation.  Aligned with RBI’s stance, it’s imperative to have strong governance, risk management, compliance culture, and customer protection within the sector. RBI's collaborative stance and the current market conditions work well for the economy, encouraging lower interest rates and increased investments. Collaboration of regulators and market players is important for the growth and evolution of the financial sector”

Optimistic on demand for credit through gold loans, MSME loans, microfinance and housing loans

George Alexander Muthoot, MD, Muthoot Finance: In alignment with the evolving growth-inflation dynamics and continued challenges in the global economy, we welcome the RBI’s prudent decision to maintain status quo on the repo rate and its stance on ‘withdrawal of accommodation’. We are encouraged by the resilience of the Indian economy, and further RBI’s increased projection on GDP growth at 7.2%, up from 7%. Against the backdrop of a favorable forecast of above-normal southwest monsoon, boost in investment activity and revival in rural demand, we remain optimistic on demand for credit through gold loans, MSME loans, microfinance and housing loans. We were also glad to witness the resilient performance showcased by the Indian financial ecosystem backed by improvement in asset quality, enhanced provisioning for bad loans, sustained capital adequacy and rise in profitability. Such recognitions encourage NBFCs like us to boost our growth multi-fold.

The other important aspect touched upon by MPC today was safeguarding consumer interest through guidelines on Key Facts Statement (KFS). We believe that the proposed Digital Payments Intelligence Platform by RBI to curb and mitigate growing digital payment frauds and continue to protect customers’ confidence in the Indian financial system is a very progressive step. As a trusted and compliant NBFC, we have taken proactive steps to strengthen our digital platforms to focus on cybersecurity and fraud detection so as to provide a safe and secure environment for our customers.


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