Archive · 18 Jun 2025
RBI Actions Expected to Boost NBFC Funding
The Reserve Bank of India (RBI) made moves to help banks and financial companies.
They lowered a key interest rate (repo rate) and also gave banks more money.
This should help these companies lend more money out.
Banks are also now allowed to lend to financial companies with fewer restrictions than before.
Because of this change, banks are cutting interest rates to make it easier for people and companies to borrow.
RBI cut repo rate by 50 basis points to 5.5%, its third reduction since Feb 2025.
CRR was slashed by 100 basis points, injecting Rs 2.5-lakh crore of liquidity.
Risk weight norms on unsecured lending were eased, encouraging bank lending.
NBFCs anticipate more bank funding due to increased liquidity.
Some banks have already reduced lending rates in response to RBI's cut.
- Who
- Reserve Bank of India (RBI)
- What
- RBI policies are set to improve the business environment for NBFCs.
- When
- February 2025 (Risk weight reversal)
- Where
- India
- Why
- To improve liquidity, encourage bank lending to NBFCs, and support economic growth.
- Repo Rate (Current)
- 5.5%
- CRR Reduction
- 100 basis points
- Liquidity injected
- Rs 2.5-lakh crore
- Shriram Finance borrowings
- Rs 2.34 lakh crore
- SBI External Benchmark Rate Cut
- 50 bps to 8.15%
- HDFC Bank MCLR Reduction
- Up to 10 bps (8.90% to 9.10%)
Sources
Banks’ credit growth slows to 3 year low of 9% in May
SBI cuts savings rate to 2.50%; retail TDs rates down by 25 bps
NBFCs shifting funding strategy, tapping public deposits and bond markets for capital: Report
RBI Signals Possible Rate Cuts If Inflation Eases: Governor Malhotra
