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Below is quote on Pre-Expectation view on RBI MPC meeting and impact on NBFCs By Rahul Chander, MD & CEO of LivFin

"The Reserve Bank of India's Monetary Policy Committee's unscheduled meeting this week is unlikely to spring a surprise with an off-cycle rate hike, even though it comes a day after the Federal Reserve's policy decision and as unseasonal rains that have damaged crops intensify the inflationary pressure on the Indian economy.  MPC has gone for a cumulative 190 basis points of key policy rate hike since May, taking the repo rate to pre-Covid levels. The encouraging employment numbers, showing growth at the fastest pace in three years on the back of strong factory output, is another factor which will affect any decision of the RBI in increasing rates at this time. If the MPC goes for another round of rate hike, it will add to the concerns of NBFCs as they struggle to maintain profitability in an already challenging economic environment, as frequent increases in interest rates not only dents the number of loan takers but carries a serious risk of default from existing borrowers. For an NBFC the measurement of profit is the difference between the cost of borrowing, which essentially implies that these institutions have to raise funds to lend it to consumers, and the cost of credit, which means additional charges on loans"

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