RBI policy growth-oriented & borrower-centric: Experts

Reserve Bank monetary policy action to cut repo rate by large 50 basis points is among the most growth-oriented and borrower-centric interventions seen in recent years, and will reduce repayment burden on individuals as well as corporate, experts said.

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Home, auto and other loans are likely to cost less as the Reserve Bank of India (RBI) cut interest rates by a larger-than-expected 50 basis points on Friday, and unexpectedly reduced the cash reserve ratio for banks to make available more money to lend in a bid to boost the economy.

Bandhan Bank Chief Economist Siddhartha Sanyal said the monetary policy committee (MPC) meeting sprang several major surprises, including 50 bps against expectation of a 25 bps rate cut.

Bank of Baroda Chief Economist Madan Sabnavis said the RBI has surprised with a 50 bps cut in repo rate and cut in CRR. However, significantly it has been stated that the stance is changed to neutral, which also means that we may not expect rate cuts in the near future.

Shikhar Aggarwal, Chairman of BLS E Services, said the reduction in repo rate will bring relief to borrowers with lower EMIs, marking a cumulative 100 bps reduction since February.