RBI Cautioned on High Rates Charged by NBFCs

The 25 basis points reduction in repo rate will directly benefit 79 percent of consumers who have floating rates, says Rishi Anand, managing director and chief executive officer (MD & CEO) of Aadhar Housing Finance. In an interview in New Delhi, Anand told Harsh Kumar that he expects growth rates of 20-22 percent in assets under management and 18-20 percent in disbursement in the financial year 2025-26 (FY26) for the non-banking financial company. Edited excerpts:

- Rishi Anand

The Reserve Bank of India (RBI) reduced the repo rate (RR) by 25 bps to 6.25 percent. How will this impact housing finance lending?

I see this as a very positive development. After five years, the reduction in the repo rate will have a direct impact on consumers. For instance, in the case of Aadhar Housing Finance, we have a total liability book of ₹15,000 crores of which 12 percent is linked to the repo rate. The remainder is tied to the MCLR (Marginal Cost of Funds Based Lending Rate), which means the repo rate will influence our costs immediately, while the MCLR adjustment may take about three to six months before we can pass on any changes to consumers.

It ultimately depends on how banks respond. If they pass on the entire 25 basis points, which isn't always typical, consumers will feel the effects. Since 79 percent of consumers have floating rates and 80 percent of borrowing is also floating, any change will directly impact them. Overall, this is a beneficial move that should help consumers.