Monetary policy a breather for banks; easing CRR can improve margins

As a push to ensure that retail loans remain growth drivers for banks, RBI has incentivised credit to segments such as automobile, housing and MSMEs

The Reserve Bank of India’s (RBI) monetary policy seems to have played its part to push growth, at least in select important pockets like loans to retail, micro- small and medium enterprises (MSMEs) and real estate. 

The Nifty Bank gained over 1 per cent, with IndusInd Bank, SBI, and Axis Bank among big gainers (up 1.8-4.9 per cent), while non-banking financial companies (NBFCs) like Indiabulls Housing, LIC Housing and PNB Housing surged 5-15 per cent.

To ensure retail loans remain growth drivers for banks, the RBI has incentivised credit to segments such as automobile, housing and MSMEs. Consequently, banks need