RBI's rate cut to boost NBFCs, with larger players and fixed-rate lenders set to gain.
Summary
The Reserve Bank of India's (RBI) 25 bps rate cut is expected to positively impact Non-Banking Financial Companies (NBFCs) in India. Larger NBFCs and fixed-rate retail lenders are anticipated to experience the most significant Net Interest Margin (NIM) expansion due to improved liquidity and transmission.
Key Points
- RBI announced a 25 bps rate cut.
- NBFCs are expected to benefit from the rate cut and improved liquidity.
- Larger NBFCs and fixed-rate retail lenders are expected to see the strongest NIM expansion.
- Rural demand is recovering, and microfinance stress is easing, supporting credit growth.
Full Article
India’s NBFCs are set to benefit from the RBI’s 25 bps rate cut and improved liquidity, with larger players and fixed-rate retail lenders expected to see the strongest NIM expansion. Elara Capital’s Shweta Daptardar says transmission will pick up in H2, rural demand is recovering, and microfinance stress is easing, supporting healthier credit growth ahead.