South Indian Bank and Choice International Welcome RBI’s Balanced Policy Stance and Investor-Friendly Reforms
Mr. Vinod Francis, SGM & Chief Financial Officer, South Indian Bank:
“The RBI‘s decision to keep the repo rate unchanged at 5.25% while maintaining a neutral stance reflects a balanced, prudent approach amid global uncertainties. With GDP growth revised to 6.6% and CPI inflation at 5.1% within the target range, the central bank rightly flags upward inflation pressures while demonstrating confidence in India‘s resilient economy. For the banking sector, this policy provides stability for asset-liability management and sustained credit growth. For borrowers, the status quo ensures no immediate change in loan servicing costs, offering a stable environment for home, vehicle, and business loans. The cautious neutral stance underscores the RBI‘s commitment to monitoring inflation and global developments before further action, with rates expected to remain low for an extended period. The regulatory measures are equally significant. The proposal to increase NRI/OCI investment limits in listed equity without SEBI registration, extended to all individual PROIs, plus the removal of capital gains tax on government securities for foreign investors, will strengthen foreign currency inflows and banking liquidity. For banks with strong NRI customer bases, the FCNR(B) deposit relaxation aids deposit mobilisation and funding flexibility. Improved forex liquidity and greater foreign participation in government bonds contribute to a stable operating environment. As Governor Sanjay Malhotra noted, India‘s economy is ‘in a good spot,’ and this policy appropriately balances growth with macroeconomic stability amid external uncertainty, creating a conducive environment for responsible credit expansion and financial inclusion.”
Mr. Arun Poddar, CEO, Choice International Limited:
“The RBI‘s decision to keep the repo rate unchanged at 5.25% while maintaining a neutral stance reflects a balanced, pragmatic approach amid elevated global uncertainty and rising crude oil prices. The upward revision in CPI inflation projections to 5.1% and GDP growth outlook to 6.6% highlights the central bank‘s focus on price stability while recognizing the resilience of India‘s economy and strength of its macroeconomic fundamentals, as Governor Sanjay Malhotra noted that India‘s economy is ‘in a good spot’. Beyond the rate decision, the policy’s key highlight is its emphasis on enhancing India‘s appeal to global investors. The proposal to increase investment limits for NRIs and OCIs in listed equity instruments without SEBI registration, and to extend the same facility to all individual Persons Resident Outside India (PROIs), is a significant step toward broadening participation in Indian capital markets, expected to improve market depth, liquidity and long-term capital inflows. Equally important is the removal of capital gains tax on government securities investments for foreign investors. This move strengthens the attractiveness of India‘s bond market and could encourage greater foreign participation in government debt. At a time of heightened global volatility, these measures reinforce investor confidence, support capital inflows, and reaffirm India‘s commitment to building deeper, more globally integrated financial markets, with the policy rate expected to remain low for an extended period.”