The Reserve Bank of India may have cut interest rates thrice this year, but that’s no respite for NBFCs which are facing the crisis of confidence.
The Monetary Policy Committee of RBI has cut repo rate by 25 basis points last week and changes its stance on liquidity from neutral to accommodative.
Due to risk aversion by the larger market segment of investors class especially institutional side, credit spread for more leveraged ones and non-AAA NBFC may widen and miss the advantage of rate cuts.
Post rate cut and change of stand from neutral to accommodative, the rates have rallied and yields down by 8-10 bps. This kind of rally may continue and gain moment in downside post-budget with improvement inflows from foreign portfolio investors.
RBI has assured of maintaining adequate system liquidity. With 21 basis points decline in the weighted average lending rate on fresh rupee loans since January, the central bank felt monetary policy transmission has been faster than earlier.
- : Chennai
- : Tamilnadu
- : India