The Monetary Policy Committee (MPC) of the RBI has resolved to maintain the policy rates at the current levels while maintaining a neutral stance the matter. This reflects a wait and watch approach on the economic situation which has been significantly impacted by the West Asian situation. External uncertainties on oil and gas prices and availability thereof and the consequent impact on GDP growth are difficult to estimate with certainty at this moment. Inflation would inch up in the next few months given the impact of recent fuel price hikes by the Government. The El Nino impact on the South West Monsoon is also an area to watch out for.
However, the RBI has clearly indicated that adequate liquidity would be available in the banking system and this should aid the growth of capital expenditure and additional working capital demand from the corporate and MSME sectors. The fact that YOY credit growth has increased to 15.4% from 12.1% is indeed encouraging.
FIDC expects the economy to continue to grow at 6.5% plus in 2026-27 pitching India at the top of the growth table among large economies. While global uncertainties may have an impact, India’s inherent strength and large local demand should be effective counters in helping uninterrupted GDP growth. This should largely aid NBFCs in expanding their loan books in a calibrated manner. The recent trend of improving credit quality (evidenced by lower GNPA numbers) should also add to business confidence among NBFCs.