The proposed public repository for digital lending apps is a significant move towards enhancing oversight and protecting customer interest
Rajiv Sabharwal, MD & CEO of Tata Capital;
George Alexander Muthoot, MD, Muthoot Finance
Rajendra Kumar Setia – MD and CEO, SK Finance
FinTech BizNews Service
Mumbai, August 8, 2024: Monetary Policy Committee (MPC) of the RBI today decided by a 4 to 2 majority to keep the policy repo rate unchanged at 6.50 per cent. Here are the views of the leading NBFC leaders:
Rajiv Sabharwal, MD & CEO of Tata Capital; Rajendra Kumar Setia – MD and CEO, SK Finance; George Alexander Muthoot, MD, Muthoot Finance and V. P. Nandakumar, MD & CEO at Manappuram Finance have shared their insights on the RBI’s measures:
Rajiv Sabharwal, MD & CEO of Tata Capital;
· Post Union Budget 2024, the focus remained on the repo rate, which the RBI has kept at 6.5% for the ninth consecutive time, emphasizing the importance of reaching a 4% CPI target.
· Continued improvements in the NBFC sector indicates a healthy financial ecosystem, offering opportunities for growth while aligning with regulatory expectations.
· Highlighting prudent lending practices, maintaining rigorous underwriting standards and post-sanction monitoring are crucial for NBFCs to mitigate risks associated with retail loans. Sustainable growth is imperative for longevity.”
V. P. Nandakumar, MD & CEO at Manappuram Finance: “Today’s MPC decision to keep the repo rate unchanged at 6.5% did not come as any surprise as the rate setting committee once again reiterated its stand on containing inflation without sacrificing growth. More importantly, the apex bank has kept the GDP growth forecast for the current fiscal unchanged at 7.2% which underscores its stance of `withdrawing accommodation' while supporting growth. The MPC has decided to keep the repo and other policy rates unchanged in view of its inflation forecast for the current fiscal pegged at 4.5%. Though headline CPI print is moderating, the apex bank has decided to keep a strict vigil on underlying price pressures in view of the higher food prices. The key takeaway from the Policy is that a rate cut may be three or four quarters away depending on evolving headline inflation print and economic growth.”
Rajendra Kumar Setia – MD and CEO, SK Finance: “Maintaining policy rates reflects a prudent continuity in a goal based approach and seems to be in line with market expectations. With core inflation showing signs of moderation, backed by a good monsoon, we expect robust demand in the rural and semi-urban economy. Regulator's focus on bringing down inflation in a sustained manner continues to support a sustained long-term growth trajectory.”
George Alexander Muthoot, MD, Muthoot Finance: “We commend the RBI’s commitment to maintaining stability in India’s financial system by keeping the repo rate unchanged at 6.5% and its stance on ‘withdrawal of accommodation’. This prudent approach is crucial, particularly given the uneven expansion owing to geopolitical tensions in the Middle East. Despite these challenges, we are glad to witness stability in domestic economic activity on the back of the steady progress in south-west monsoons.
We take pride in RBI’s appreciation of the Indian financial system as it has been able to maintain resilience and showcase broader macroeconomic stability. At the same time, we also diligently acknowledge the key areas of concern highlighted by the honorable RBI Governor today including the need to closely monitor alternate investment avenues, be vigilant on personal loans, adhere to loan to value (LTV) ratio, risk weights and monitoring of end use of funds, and unprecedented global IT outage.
As India’s largest gold loan NBFC, we recognize the importance of enhancing sturdiness amidst global disruptions. The RBI’s call for banks and NBFCs to strengthen their risk management frameworks aligns well with Muthoot Finance’s proactive measures to maintain operational resilience and service continuity even during unprecedented and widespread outages. Additionally, the proposed public repository for digital lending apps is a significant move towards enhancing oversight and protecting customer interest. At Muthoot Finance, we take serious measures to bolster our digital platforms, focusing on cybersecurity and fraud detection to provide a secure financial environment and protect our customers’ confidence in our digital app. With digitalization transforming the financial sector rapidly, we are also committed to strategically upskill and reskill our workforce in line with the RBI’s guidance to navigate digital complexities effectively.”
