RBI's cash influx to have little effect

Mumbai, April 24: The decision by India’s central bank to cut rates and flood the banking system with cash will do little to immediately boost demand in Asia's third-largest economy as global uncertainties restrain corporate investment, bankers and sources said.

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The infusion of liquidity, along with two consecutive rate cuts, will at best prevent further deceleration in growth, which probably fell to a four-year low of 6.5% in the financial year ended March 31, 2025, they said.

‘The Reserve Bank of India's (RBI) rate actions and liquid-ity measures are a "welcome relief" for banks but the global macroeconomic outlook has become more uncertain due to the recent trade tariff-related measures and the volatility sur-rounding them, said Sashidhar Jagdishan, CEO of HDFC Bank, India's largest private lender by assets.

“Corporates have adopted a wait-and-watch stance, and we are waiting for more clarity,” he added.