RBI hikes repo rate by 40 bps: Analysts see muted impact on banks' NIM, PAT

The move to hike repo rate and cash reserve ratio by the Reserve Bank of India (RBI), analysts said, may not have a significant negative impact on banks as they will benefit from higher yields on the lending portfolio that are linked to external benchmarks. Non-bank finance companies (NBFCs), however, may feel more heat, except those engaged in mortgage financing.
 

"A pick-up in advances growth, improving asset mix and continued hikes in policy rates will drive higher yields for banks over fiscal 2022-23 (FY23). However, a rise in deposit rates and any material change in demand environment have to be