The RBI’s decision to start the easing cycle with a 25-bps cut was timely, contextual and also well communicated with respect to regulatory changes, State bank of India Chairman C.S. Setty said in his comment on the monetary policy announced on Friday.
“The RBI’s growth and inflation forecasts for FY26 clearly shows the delicate trade-off between growth and inflation. The regulatory announcement on forward contract, reviewing trade settling cycle and addressing cybersecurity in banks and payment systems will ensure better price discovery, more broad basing of participants and ensuring trust in digital banking,” he said.
Chandrajit Banerjee, director general, CII said, “This calibrated approach by the central bank reflects a careful balance between fostering economic growth and maintaining financial stability. The rate cut is anticipated to complement the consumption-boosting measures announced in the Union Budget 2025-26, providing a boost to domestic demand drivers.”
“Importantly, the recent series of liquidity easing measures introduced over the past two weeks will aid in the effective transmission of the rate cut to the productive sectors of the economy. Additionally, the RBI’s indication that it will inject liquidity as needed to address any tightening of frictional and durable liquidity in the system will ensure that monetary policy transmission remains effective,” he added.
Sudipta Roy, MD & CEO, L&T Finance Ltd., said, “RBI’s monetary policy decision is a statement of unwavering policy support to domestic growth. Combined with last week’s record tax cuts, the policy rate cut will help reinvigorate credit channels in the economy.”
“Assertion of pro-active liquidity support while continuing with a neutral stance is an excellent step to balance the global headwinds and also keeping its options open to respond to evolving financial conditions,” he said.
“As always, RBI is ahead of the curve in its focus on consumer protection and mitigating cyber risks. Announcements of a separate domain for the financial sector is a welcome step in that direction,” he added.
Manoj Gaur, CMD, Gaurs Group and chairman CREDAI National said, “The repo rate cut by RBI is a very welcome move. Coming at the heels of a people’s friendly budget, the repo rate cut of 25 bps announced by RBI will definitely infuse positive sentiments in the economy.
The regulatory announcement on forward contract, reviewing trade settling cycle and addressing cybersecurity in banks and payment systems will ensure better price discovery, more broad basing of participants and ensuring trust in digital banking, says SBI’s Setty.
“Coupled with the income tax rebate, and tax concessions on second home and rental income, it will not only infuse liquidity in the market but also leverage the real estate sector’s investment potential. Real estate nationally has seen some good investment nationally in the past year and this trend is bound to continue in the coming quarter with this announcement,” he said.
Domnic Romell, president, CREDAI-MCHI said, “The Reserve Bank of India’s decision is a timely and welcome move that will provide much-needed relief to homebuyers and developers.”
“This, combined with the Union Budget 2025’s pro-middle-class policies—such as the increase in the income tax exemption limit to ₹12 lakh, higher TDS limits on rent, and enhanced home loan interest deductions—creates an environment that encourages consumer spending and homeownership. The government’s fiscal discipline and focus on economic growth further reinforce confidence in India’s real estate sector,” he said.
Published – February 07, 2025 10:56 pm IST
