New Delhi, Feb 7 (Reporter) The industry across sectors has welcomed the decision to cut key rate by 25 bps by the RBI, first in five years, saying the move will provide much needed support to the economy at this juncture and will ease the liquidity crisis to some extent. Commenting on RBI’s Monetary Policy announced earlier on Friday, Mr Harsha Vardhan Agarwal, President, FICCI said, “We welcome RBI’s decision to cut the repo rate by 25 basis points, a move that will provide much-needed support to the economy at this juncture”. RBI’s decision to ease the policy rate is a timely and forward-looking step and we hope that the banking sector would follow through on this cue and a lowering of lending rates will be seen. Further, while RBI has maintained a neutral stance with regard to Monetary Policy, the indication towards a more flexible interpretation of inflation targeting sets the stage for further rate cuts over the near term, FICCI said. The Reserve Bank of India’s latest credit policy has set the tone for the lending industry in 2025. With the repo rate at 6.25 percent, lending institutions will continue to balance affordability and profitability. India's credit market, which saw a 15 percent YoY growth in retail loans, is poised for further expansion if borrowing costs remain stable, says CA Neeru Puri, Chairman, RupeeQ.com For borrowers, home loan rates currently averaging 8.25–9.00 percent and personal loans at 10.50–16.00 percent could see marginal shifts depending on liquidity conditions. The MSME sector, contributing 30 percent to GDP, will particularly benefit if credit flow increases. At RupeeQ.com, we anticipate increased demand for unsecured loans, given that digital lending grew by 40 percent last year. This policy will shape lender strategies, and as a leading aggregator, we remain committed to providing the best financial solutions to our customers, Puri added. The RBI has announced the much expected 25 bps repo rate cut - focused on cautious growth, while remaining aligned to a durable inflation target! Headwinds stemming from global volatility seems to be high on RBI's radar, as they maintained a neutral stance, while all domestic markers – Inflation, Agri & Manufacturing activity, Consumption demand, Liquidity and Financial Markets – are showing a directionally positive flavor. For me, takeaway of the policy is, "be prepared for a smoother albeit slower ride, than a bumpy fast-paced one,” says Manish Kothari, President & Head Commercial Banking, Kotak Mahindra Bank Limited. The Union Budget 2025-26 announced last week has laid a strong foundation for investment-led growth with an emphasis on manufacturing, MSMEs and infrastructure. Today’s rate cut complements these measures, lending further support to India’s growth outlook, the apex industry association said. “FICCI is confident that the combined impact of a pro-growth budget and a supportive monetary policy will help strengthen India’s growth trajectory, support consumption, and drive long-term investments”, said Mr Agarwal. Girish Kousgi, MD & CEO, PNB Housing Finance, said "The RBI’s decision to cut the repo rate by 25 basis points the first rate cut since 2020 is a significant move that will provide much-needed relief to home loan borrowers and give a strong boost to the housing sector. Lower interest rates directly enhance affordability, making home loans more accessible for aspiring homeowners and first-time buyers.” This is in line with market expectations the RBI announced a 25 Bps Repo rate cut. Interesting takeaway was the need for considering “flexible inflation targeting” which will help balance inflation and growth. The stance however was retained at Neutral more due to potential risks from volatile global markets. Expect RBI to remain vigilant and do what it takes to ensure adequate liquidity to support growth but also keeping an eye on inflation. Future action will depend on global headwinds and local macro- economic factors, Shanti Ekambaram, Deputy Managing Director, Kotak Mahindra Bank, said. Mr. Ashwani Dhanawat, ED and Chief Investment Officer, Shriram General Insurance, commented “the RBI’s decision to cut the repo rate by 25 basis points to 6.25 percent is a welcome and expected move that aligns with market predictions, providing much-needed support for economic growth. As the government pursues fiscal consolidation, aiming for a fiscal deficit of 4.8 percent of GDP for the current year and targeting a further reduction to 4.4 percent in 2025-26, this rate cut reflects a proactive approach to fostering a conducive environment for investment and boosting consumer confidence.” Prashant Pimple Chief Investment Officer - Fixed Income, Baroda BNP Paribas Mutual Fund, said “The RBI monetary policy committee unanimously delivered a rate cut of 25 bps bringing down the repo rate to 6.25 percent and the stance continued at neutral. The policy move is in line with our as well as market expectations. The overall tone of the policy was dovish with Economic Growth to have taken precedence over inflation & currency concerns in this monetary policy. RBI’s intent to support growth is visible, while remaining watchful of global headwinds that could pose risk to domestic growth and inflation outlook. RBIs commitment to provide sufficient liquidity to the banking system was reiterated and was encouraging. Additional liquidity measures may be announced outside of MPC...////...