Quote on MPC Reaction by Mr. Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank
Below the Quote on MPC Reaction by Mr. Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank
“The Reserve Bank of India’s decision to raise the policy repo rate by 25 basis points to 5.50%, while simultaneously shifting the monetary policy stance to “calibrated tightening,” marks an important inflection point in India’s monetary policy journey. For much of the recent period, monetary policy had the space to support growth as inflation had moderated, and domestic economic activity remained resilient. The latest policy recognizes that the environment is evolving that warrants greater policy vigilance. Inflation remains the variable to watch.
At the same time, the RBI has retained confidence in the underlying strength of the Indian economy. Growth remains broad-based, domestic demand continues to provide an important anchor, and the financial system is significantly better positioned to absorb external shocks than it was in earlier cycles. The era of automatic rate cuts is, for the moment, behind us. However, calibrated tightening should not be interpreted as a commitment to a prolonged or aggressive rate-hiking cycle. The policy framework is becoming more data-dependent and risk-sensitive. For the banking sector, the next phase will therefore be about balancing growth with resilience stronger deposits with prudent credit, profitability with asset quality, and expansion with capital discipline.
At Capital Small Finance Bank, we remain confident in the underlying strength of the Indian economy and the long-term opportunity presented by India's rising formalisation, financial inclusion and credit penetration. The opportunity remains compelling. The task now is not simply to grow through the cycle, but to build institutions capable of growing sustainably through every cycle.”
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