At some stage soon there will be a reduction in Aadhar RPLR thereby reducing EMI burden. The only wait now is for the banks to pass on this benefit to the NBFCs
FinTech BizNews Service
Mumbai, April 9, 2025: The Monetary Policy Committee (MPC) held its 54th meeting from April 7 to 9, 2025 under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC unanimously voted to reduce the policy repo rate by 25 basis points to 6.00 per cent with immediate effect. The real GDP growth for 2025-26 is now projected at 6.5 per cent, with Q1 at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 at 6.3 per cent. The risks are evenly balanced.
The leaders of the NBFC sector have shared their viewpoints on the MPC decisions:
Rishi Anand, MD & CEO, Aadhar Housing Finance limited:
“The additional 25-basis points rate cut to 6% by the Reserve Bank of India is a significant step in supporting growth and completely in line with the industry’s expectations. Since nearly 80% of Aadhar Housing Finance's existing borrowers are on floating rates this reduction will benefit them. At some stage soon this will lead to reduction in Aadhar RPLR thereby reducing EMI burden. The only wait now is for the banks to pass on this benefit to us.
Furthermore, many first-time buyers in the Economically Weaker Section (EWS) and Lower Income Group (LIG) segments will now find it easier to take that crucial step towards home ownership as this move directly translates into lower EMIs and improved affordability. This proactive liquidity support from the central bank clubbed with government initiatives like PMAY 2.0, (SWAMIH) 2.0 fund, income tax exemptions, the introduction of a mortgage guarantee fund will positively accelerate housing demand and aid to government’s vision of housing for all.”
Sachin Pillai, Managing Director & Chief Executive Officer, Hinduja Leyland Finance:
Sachin Pillai, Managing Director & Chief Executive Officer, Hinduja Leyland Finance:
“The RBI’s decision to reduce the policy repo rate by 25 basis points is a welcome move in the current environment. It opens up space for NBFCs like us to reduce borrowing costs and pass on the benefits to end customers in vehicle financing, affordable housing finance and SME financing where credit sensitivity remains high.
The decision to broaden the scope of co-lending and move towards a more principle-based regulatory framework is a positive step. It will encourage greater collaboration between banks and NBFCs, improve access to credit in underserved markets, and strengthen the foundation for inclusive growth.
Coupled with the shift to an accommodative stance, these measures signal a clear intent to support growth without losing sight of inflation stability. The policy outlook aligns with our vision to scale responsibly, strengthen our retail presence, and meet Bharat’s evolving credit needs more efficiently.”
George Alexander Muthoot, Managing Director, Muthoot Finance:
George Alexander Muthoot, Managing Director, Muthoot Finance:
“The Reserve Bank of India’s decision to reduce the repo rate by 25 basis points to 6% and shift its stance to ‘accommodative’ underscores a clear commitment to supporting growth. While this move will ease borrowing costs and enhance liquidity in the short term, the real test will be in converting this into sustained credit demand. For NBFCs like Muthoot Finance, the policy shift is encouraging as it signals improved access to funds and a potentially lower cost of capital. The accommodative stance is also expected to boost consumer confidence and fuel consumption, particularly in semi-urban and rural areas. Overall, we believe this step will positively influence India’s economic momentum amid global headwinds.”
Girish Kousgi, MD & CEO, PNB Housing Finance
Girish Kousgi, MD & CEO, PNB Housing Finance:
"The RBI’s decision to cut the repo rate by 25 basis points the first rate cut since 2020 is a significant move that will provide much-needed relief to home loan borrowers and give a strong boost to the housing sector. Lower interest rates directly enhance affordability, making home loans more accessible for aspiring homeowners and first-time buyers.
This decision aligns with the Finance Ministry’s recent budget announcement, which emphasized the need for fiscal and monetary policy to work in tandem to support economic growth. The rate cut is expected to drive renewed demand in the housing market, boosting overall sentiment and encouraging investments in the real estate sector.
We remain committed to supporting homebuyers with competitive loan offerings and seamless financing solutions, both in-person and digital, ensuring they can achieve their dream of homeownership. This rate cut, combined with the recent income tax relief, will further strengthen consumer confidence and contribute to sustained growth in the housing finance sector."
Arvind Kapil, Managing Director & CEO of Poonawalla Fincorp:
“We welcome the Reserve Bank of India's mature and forward-looking move to adopt an accommodative policy stance, underpinned by a balanced view on inflation and growth. The repo rate cut, coupled with the commitment to maintain adequate liquidity, reflects a timely and prudent response to evolving macroeconomic challenges. This stance is a positive step toward reinvigorating demand and catalyzing investments across sectors. For the NBFC sector, in particular, it signals a conducive environment to deepen credit access and drive inclusive growth. We believe the proposed policy revisions will stimulate the banking and financial services ecosystem in the right direction and support the broader goal of sustaining a healthy and resilient economy."
Viram Shah, Founder & CEO, Vested Finance:
"The Reserve Bank of India's decision to cut rates by 25 basis points marks a critical inflection point for Indian markets. This isn't just another adjustment in the monetary policy cycle—it's a defensive response to a fundamentally changing global trade landscape. By slashing growth forecasts from 6.7% to 6.5% and shifting to an "accommodative" stance, the RBI is acknowledging that Trump's tariffs represent a structural threat to India's growth model. We believe cumulative rate cuts could reach 100 basis points reflecting that trade tensions will persist rather than resolve quickly. For investors, this suggests a market environment where defensive positioning may outperform growth-oriented strategies despite monetary easing.
India remains the fastest-growing major economy, but the dramatic deceleration from 9.2% to 6.5% in just one year underscores the vulnerability of even the strongest economies to protectionist policies. As global recession probabilities climb to 60%, the RBI's pre-emptive action may prove crucial in maintaining India's relative economic outperformance."
Kishore Lodha, CFO, UGRO Capital
“This MPC policy appears to be a continuation of the various measures taken by the RBI over the last 4–5 months. Durable liquidity has been returning to the system over the past fortnight, thanks to these measures by the RBI. The change in stance to “accommodative” is consistent with this trend. The rate cut is a welcome move that will help ease the high-interest-rate regime we have experienced over the past three years, although the transmission of this rate cut needs to be monitored, as banks are under pressure while passing on the benefits to all customer segments due to higher borrowing and operational costs. Making co-lending arrangements applicable to all regulated entities, rather than limiting them to PSL loans, will significantly boost volumes in co-lending.
Initially, when the RBI guidelines were introduced, they applied only to PSL (Priority Sector Lending) loans. However, on a case-by-case basis, the RBI was granting approvals to banks for co-lending in non-PSL segments. As per recent studies, about 75% of the co-lending volumes handled by banks are in non-PSL loans. However, these were based on approvals granted by the RBI to specific banks that had sought permission. Now, the RBI has broadened the framework and made it applicable to all regulated entities and for all products. This means any bank can now partner with any NBFC and include their entire range of products under the co-lending model. This will significantly broaden the scope of co-lending, and we will see banks scaling up volumes far beyond current levels. Though the process of forming partnerships and executing co-lending agreements remains quite lengthy and requires considerable effort, it is expected to gain momentum sooner rather than later.”
Rajendra Kumar Setia, MD & CEO, SK Finance:
Rajendra Kumar Setia, MD & CEO, SK Finance:
“The RBI’s decision to reduce the repo rate by 25 bps to 6% in its first monetary policy of FY25-26, along with a shift in stance to ‘accommodative’ comes at a critical juncture and serves as a catalyst for supporting and accelerating credit momentum across the economy.
The announcement reflects a clear intent to support inflation adjusted growth, with a continued focus on maintaining inflation to the earlier set target of 4%, supported in a sustained manner, by easing food prices. This creates an environment conducive for lending in the credit and banking ecosystem as the economy gears up for the next phase of growth. The reduction in the repo rate allows a faster credit growth helping lenders like us expand our services to support the underserved communities through responsible lending in rural and semi urban India where we largely operate.”
