The retail bank depositors are relieved due to the pause in the rate cut, as they do not expect any further reduction in the deposit rates. As expected, the policymakers made a unanimous decision to keep the repo rate unchanged, while maintaining a neutral stance. This means, in the future, the RBI will take a view on rate cuts based on key indicators like growth, inflation, and other internal and external factors.

The RBI had made a jumbo cut of 50 bps, and announced its decision to reduce the CRR by 100 basis points in four tranches, starting from September 2025, to ensure liquidity and credit flow. About 2.5 lakh crore is expected to be released to the banking system, which is a bonus for the banks as the RBI doesn’t pay any interest to the CRR kept with it.

Corporates are avoiding banking channels and resorting to other cheaper means for their financial requirements, banking experts said.

“With the liquidity easing measures of the regulator, more flow is expected to happen in the sectors like agriculture, MSME, Pharma, exports and affordable housing etc.  While the rate of interest is a factor, a need-based delivery is very important to these sectors,” analysts said. Apart from affordable and timely credit, factors like market, infrastructure facilities, import policies, export incentives, tax sops, etc also play an important role.