{"id":10126,"date":"2025-06-09T18:26:01","date_gmt":"2025-06-09T12:56:01","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=10126"},"modified":"2025-06-09T18:26:01","modified_gmt":"2025-06-09T12:56:01","slug":"how-rbis-100-bps-easing-cycle-impacts-banks-the-economy-you","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/how-rbis-100-bps-easing-cycle-impacts-banks-the-economy-you\/","title":{"rendered":"How RBI\u2019s 100\u202fbps Easing Cycle Impacts Banks, the Economy &#038; You?"},"content":{"rendered":"<p data-start=\"91\" data-end=\"314\"><em data-start=\"109\" data-end=\"276\">A 100\u202fbps rate cut since February 2025 is a positive step to boost demand for loans or consumption, but deposit rates\u2014especially for retail\u2014are set to trend lower<\/em><\/p>\n<h2 data-start=\"321\" data-end=\"382\">1. Bank Credit: Borrowing Gains, But Recovery Slow<\/h2>\n<ul data-start=\"384\" data-end=\"624\">\n<li data-start=\"384\" data-end=\"464\">\n<p data-start=\"386\" data-end=\"464\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">The Repo rate has been lowered by 100\u202fbps in 2025, with the last 50\u202fbps front-loaded in June<\/span> .<\/p>\n<\/li>\n<li data-start=\"465\" data-end=\"545\">\n<p data-start=\"467\" data-end=\"545\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Lower rates sweeten borrowing: however, credit growth remains muted at ~7% in May 2025<\/span> .<\/p>\n<\/li>\n<li data-start=\"546\" data-end=\"624\">\n<p data-start=\"548\" data-end=\"624\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Borrowing rates are moving down\u2014but reaching 2021\u201122 lows (e.g., 6.5% home loans) may take time<\/span>.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"631\" data-end=\"680\">2. The Deposit Side: Savers Take a Hit<\/h3>\n<ul data-start=\"682\" data-end=\"843\">\n<li data-start=\"682\" data-end=\"762\">\n<p data-start=\"684\" data-end=\"762\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Banks have already cut Fixed Deposit rates by 30\u201370\u202fbps since February<\/span> .<\/p>\n<\/li>\n<li data-start=\"763\" data-end=\"843\">\n<p data-start=\"765\" data-end=\"843\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Retail depositors\u2014especially small savers\u2014can expect further rate declines, prompting shifts toward income\u2011focused assets<\/span> .<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"850\" data-end=\"897\">3. Impact on Bonds and Bond Issuance<\/h3>\n<ul data-start=\"899\" data-end=\"1066\">\n<li data-start=\"899\" data-end=\"983\">\n<p data-start=\"901\" data-end=\"983\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Lower rates boost bond prices (inverse relationship), but markets have largely priced in the cuts already<\/span>.<\/p>\n<\/li>\n<li data-start=\"984\" data-end=\"1066\">\n<p data-start=\"986\" data-end=\"1066\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Corporates may rethink bond issuances, as falling yields can narrow the cost-benefit edge for funding<\/span> .<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1073\" data-end=\"1128\">\u00a04. Economic Growth: Boost or Wait-and-Watch?<\/h3>\n<ul data-start=\"1130\" data-end=\"1341\">\n<li data-start=\"1130\" data-end=\"1214\">\n<p data-start=\"1132\" data-end=\"1214\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Full-year GDP projection remains at 6.5%, despite the larger-than-expected rate cut<\/span> .<\/p>\n<\/li>\n<li data-start=\"1215\" data-end=\"1258\">\n<p data-start=\"1217\" data-end=\"1258\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Immediate uptick in growth is uncertain; real impact may unfold over the next 3\u20136 months.<\/span><\/p>\n<\/li>\n<li data-start=\"1259\" data-end=\"1341\">\n<p data-start=\"1261\" data-end=\"1341\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Lower rates nudge consumption, with household savings trending up (~12%), potentially releasing pent-up demand<\/span> .<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1348\" data-end=\"1387\">\u00a05. Capex &amp; Investment Cycle<\/h3>\n<ul data-start=\"1389\" data-end=\"1515\">\n<li data-start=\"1389\" data-end=\"1473\">\n<p data-start=\"1391\" data-end=\"1473\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Capacity use is high (75%+) but manufacturers are yet to revive capex significantly<\/span> .<\/p>\n<\/li>\n<li data-start=\"1474\" data-end=\"1515\">\n<p data-start=\"1476\" data-end=\"1515\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">If demand strengthens, the next six months will show whether RBI\u2019s cut translates into fresh corporate investment.<\/span><\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1522\" data-end=\"1562\">\u00a06. Bank Profits &amp; NIM Outlook<\/h3>\n<ul data-start=\"1564\" data-end=\"1816\">\n<li data-start=\"1564\" data-end=\"1648\">\n<p data-start=\"1566\" data-end=\"1648\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">CRR cut will flood \u20b92.5\u202flakh crore into the system, easing funding costs<\/span> .<\/p>\n<\/li>\n<li data-start=\"1649\" data-end=\"1733\">\n<p data-start=\"1651\" data-end=\"1733\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Loan yields drop faster than deposit rates: this pressures margins initially, but banks may recover NIMs by Q3\u2013Q4 FY26<\/span>.<\/p>\n<\/li>\n<li data-start=\"1734\" data-end=\"1816\">\n<p data-start=\"1736\" data-end=\"1816\"><span class=\"relative -mx-px my-[-0.2rem] rounded px-px py-[0.2rem] transition-colors duration-100 ease-in-out\">Banks with high CASA ratios and floating-rate loans benefit most<\/span> .<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1823\" data-end=\"1842\">Takeaways<\/h3>\n<ul data-start=\"1844\" data-end=\"2214\">\n<li data-start=\"1844\" data-end=\"1918\">\n<p data-start=\"1846\" data-end=\"1918\">Borrowers stand to gain first\u2014lower EMIs, easier access to credit.<\/p>\n<\/li>\n<li data-start=\"1919\" data-end=\"1989\">\n<p data-start=\"1921\" data-end=\"1989\">Savers face lower returns\u2014may shift into income-driven assets.<\/p>\n<\/li>\n<li data-start=\"1990\" data-end=\"2063\">\n<p data-start=\"1992\" data-end=\"2063\">Economy gets a delayed boost\u2014consumption up, capex their horizon.<\/p>\n<\/li>\n<li data-start=\"2064\" data-end=\"2133\">\n<p data-start=\"2066\" data-end=\"2133\">Banks see short-term margin pressure, long-term NIM recovery.<\/p>\n<\/li>\n<li data-start=\"2134\" data-end=\"2214\">\n<p data-start=\"2136\" data-end=\"2214\">Bond investors\u2014market stabilization expected; fresh cuts may be priced in.<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A 100\u202fbps rate cut since February 2025 is a positive step to boost demand for loans or consumption, but deposit rates\u2014especially for retail\u2014are set to trend lower 1. Bank Credit: Borrowing Gains, But Recovery Slow The Repo rate has been lowered by 100\u202fbps in 2025, with the last 50\u202fbps front-loaded in June . Lower rates [&hellip;]<\/p>\n","protected":false},"author":2,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"ppma_author":[1329],"class_list":{"0":"post-10126","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-political-news"}," _eael_post_view_count":0,"authors":[{"term_id":1329,"user_id":2,"is_guest":0,"slug":"snehagandhi","display_name":"Sneha Gandhi","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/10\/Sneha-Gandhi.jpeg","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/10\/Sneha-Gandhi.jpeg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/10126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=10126"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/10126\/revisions"}],"predecessor-version":[{"id":10128,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/10126\/revisions\/10128"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/10127"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=10126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=10126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=10126"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=10126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}