The RBI’s decision to cut the repo rate by 25 bps to 5.25% with a unanimous 6-0 vote and to announce ₹1 lakh crore of OMO bond purchases signals a decisive shift toward supporting growth amid a rare “Goldilocks” phase of low inflation and resilient economic momentum. With inflation projections sharply revised downward and GDP estimates upgraded, the policy stance turning affirmatively growth-supportive will ease funding costs and strengthen liquidity across the banking system. For banking industry, this environment enhances the ability to expand credit, better transmission of interest rate cuts and support productive segments of the economy.

At Capital Small Finance Bank, we expect the rate cut and OMO-driven liquidity infusion to improve portfolio transmission, and create greater room to deepen lending to MSMEs, retail borrowers, and rural economy. The neutral stance also brings policy predictability, enabling us to plan asset-liability strategies with more precision. Overall, today’s policy measures position the financial system and Capital Small Finance Bank in particular to participate more strongly in India’s next leg of growth in FY26.

Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank