2025-06-06 12:49:02 pm | Source: PR Agency
Views on RBI MPC by Dr. Bharath Supra, Associate Professor – Finance & Programme Chairperson, SBM, Navi Mumbai Campus
Below the Views on RBI MPC by Dr. Bharath Supra, Associate Professor – Finance & Programme Chairperson, SBM, Navi Mumbai Campus
The 50 basis point reduction in the repo rate, bringing it down to 5.5% is a surprise move, something that surpassed market expectations. I congratulate the Reserve Bank of India's MPC, under Governor Sanjay Malhotra, for this shot in the arm. It is exactly what India needed now to spur economic growth in the face of global uncertainties.
However, the rate cut's impact hinges critically on how effectively banks and financial institutions pass them on to end borrowers. The transmission of rate cuts to retail and SME segments has remained a sticky point. Without stronger transmission mechanisms, the RBI’s monetary easing may not translate into actual credit growth or consumer spending. I am confident that the banks and financial institutions will rise up to the occasion and do their part for the country.
However, the rate cut's impact hinges critically on how effectively banks and financial institutions pass them on to end borrowers. The transmission of rate cuts to retail and SME segments has remained a sticky point. Without stronger transmission mechanisms, the RBI’s monetary easing may not translate into actual credit growth or consumer spending. I am confident that the banks and financial institutions will rise up to the occasion and do their part for the country.
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