RBI upgrading growth expectations for the current fiscal year is also a big reassurance of strong domestic momentum despite external headwinds
FinTech BizNews Service
Mumbai, October 1, 2025: The Monetary Policy Committee (MPC) held its 57th meeting from September 29 to October 1, 2025, 2025 under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC members Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta and Shri Indranil Bhattacharyya attended the meeting.
Here are reactions of leading voices from the banks & NBFCs:
Mr. CS Setty, Chairman at SBI & Chairman at IBA:
“The RBI policy statement was an authoritative one towards unveiling of market reforms and moving beyond the rate actions. The move towards a risk based deposit insurance premium will facilitate significant improvement in bottom line of sound banks. The withdrawal of framework related to specified borrowers and allowing of M&A financing by Indian banks are growth accretive and will foster incremental credit flow from banks. Extension of timelines for repatriation from foreign currency accounts of Indian exporters in IFSC and for forex outlay for Merchanting Trade Transactions, besides simplification of reconciliation processes in EDPMS/IDPMS portals are welcome steps as they will further enhance ease of doing business for the export sector. The measures towards enhancing customer satisfaction and protection, improved use of rupee across cross border transactions will strengthen the larger financial ecosystem in terms of acceptability and improved currency outlook over medium term”
Salee S. Nair, MD & CEO, Tamilnad Mercantile Bank:
“The RBI’s decision to maintain the repo rate at 5.50% reflects a commitment to stability while nurturing growth. At Tamilnad Mercantile Bank, we align our strategy closely with this vision balancing prudence with proactive credit expansion to support India’s economic momentum. As the festive season gathers pace, we anticipate a natural rise in economic activity. Gold loans, particularly during Dhanteras, will see heightened demand, providing households with easy liquidity. At the same time, auto loans across two-wheelers, commercial vehicles, and EVs are poised for strong traction, reflecting rising mobility aspirations. For businesses, GST rationalisation and improved consumption are likely to drive higher working capital requirements, particularly among MSMEs and traders. To fund this responsibly, we continue to focus on deposit mobilisation, ensuring that credit growth remains sustainable. But the larger transformation is through digitisation. In line with RBI and government efforts to expand digital penetration, TMB is investing in mobile-first platforms, data analytics, and faster onboarding solutions. This ensures last-mile connectivity, quicker loan disbursals, and a seamless banking experience, even in semi-urban and rural areas. By aligning our growth priorities with RBI’s vision, we aim to drive inclusive, technology-led banking that strengthens both customer confidence and India’s long-term growth story.”
Mr. Rishi Anand, MD & CEO, Aadhar Housing Finance:
“The RBI's decision to maintain the repo rate at 5.5% reinforces stability at a time when India’s macroeconomic landscape is evolving rapidly. With inflation coming down to 2.6% and growth revised up to 6.8%, the outlook is positive for both borrowers and lenders. For the affordable housing sector, this provides a dual advantage, with credit costs remaining stable even as household purchasing power strengthens amid moderate inflation and lower GST rates on essential commodities. A neutral policy stance, combined with structural reforms such as GST simplification and ongoing government initiatives like PMAY 2.0, will further expand credit penetration and improve housing affordability across Bharat."
Mr. Bhavin Patel, Co-founder and CEO, Vartis and LenDenClub:
“The RBI’s introduction of the Expected Credit Loss framework from 2027 is a progressive step that will bring greater transparency, forward-looking risk assessment, and resilience to the financial ecosystem. For companies like us i.e. Vartis, we see this as an opportunity to accelerate innovation in secured lending, where asset-backed products naturally align with lower risk and stronger investor confidence. By embedding ECL principles into our models well ahead of time, we aim to build portfolios that not only safeguard against volatility but also create predictable and sustainable wealth-building opportunities for our investors.”
Mr. Sudipta Roy, Managing Director & CEO, L&T Finance:
“MPC announcements this morning were the right balance of prudence in monetary policy actions while easing credit conditions in the real economy. The status quo in policy rates was along the expected lines. However, the real action was contained in the various measures announced to improve the flow of credit in the economy. Measures like the glide path towards ECL framework, expanding scope of capital market lending, removing restrictions on collection accounts etc. are all aptly timed and will help the financial system to aid aspirational growth levels.
RBI upgrading growth expectations for the current fiscal year is also a big reassurance of strong domestic momentum despite external headwinds. The Governor's message of alignment in all domestic policies- fiscal, monetary, and regulatory, towards Viksit Bharat goals has taken the focus away from short-term external challenges towards domestic resilience and medium-term economic potential.”
Vinay Pai, Head of Fixed Income, Equirus Capital:
After front loading 50 basis point in June policy, RBI held the rate at 5.50% rate with focus has been on monetary policy transmission there has been reasonable progress with 39 bps reduction in overall lending rates on the outstanding loans and 71 bps on fresh loans. The key policy announcement was the expectation of a strong decline in FY26 inflation to 3.1% (from 3.7%) led by Q2 and Q3, while a return to above 4% inflation by Q4 and further to 4.9% by Q1Fy27 has kept RBI from further accommodation.
RBI will continue to provide ample liquidity to ensure that banks transmit rates faster, and also enable the corporate bonds issuances pick up and provide impetus on growth. The GDP forecast at 6.5% is maintained for FY 26. The other headwind stems from external risk associated with the global uncertainty linked to tariff stands high which can impact the exports and impact pressure on currency. We therefore expect the markets likely to be in range bound with a upward sloping yield curve, further rate cuts will depend on global factors and change in growth outlook. For now, a closure on tariff negotiations will be the key to calm the currency markets and stem outflows especially in the debt segment.
