RBI’s 50 bps Rate Cut Lauded as Timely Boost for Housing Demand and Economic Growth, Experts Urge Effective Transmission 11591z

By-Mr. Amit Bhagat, Co-Founder, CEO and MD, ASK Property Fund

“RBI’s announcement of a further rate cut of 50 bps is a significant proactive step at a time when demand for residential real estate is seeing signs of slowing down across segments due to increased prices. Home ownership continues to be an aspiration and dream for every Indian household, and these rate cuts, followed by reduced home loan interest rates, will strengthen home buyer confidence.

A cumulative rate cut of 1 per cent in the last 6 months is likely to benefit the affordable segment significantly, which was most impacted due to affordability”.

By-Dr. Bharath Supra, Associate Professor – Finance & Programme Chairperson, SBM, Navi Mumbai Campus

The 50 basis point reduction in the repo rate, bringing it down to 5.5% is a surprise move, something that sured market expectations. I congratulate the Reserve Bank of India’s MPC, under Governor Sanjay Malhotra, for this shot in the arm. It is exactly what India needed now to spur economic growth in the face of global uncertainties.

However, the rate cut’s impact hinges critically on how effectively banks and financial institutions them on to end borrowers. The transmission of rate cuts to retail and SME segments has remained a sticky point. Without stronger transmission mechanisms, the RBI’s monetary easing may not translate into actual credit growth or consumer spending. I am confident that the banks and financial institutions will rise up to the occasion and do their part for the country.