Current Account podcast | The shift in RBI’s policies: What’s next for lending, liquidity, and gold loans?

In this episode of the Current Account podcast, businessline’s Piyush Shukla is joined by Anil Gupta, SVP & Co-Group Head - Financial Sector Ratings, ICRA. The conversation delves deep into the latest decisions made by the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) and their implications on the Indian economy, with a focus on lending, deposit rates, and gold loans.  Gupta provides insightful analysis on the recent 25 basis point rate cut by the MPC. He discusses the expected impact of these cuts on retail and corporate borrowers, particularly the transmission to loan and deposit rates. The episode also explores the RBI's recent regulatory changes concerning gold loans, particularly the 75% Loan-to-Value (LTV) ratio and new operational guidelines. Gupta shares his thoughts on how these adjustments bring more clarity and uniformity to the gold loan industry, despite initial concerns about the impact on Non-Banking Financial Companies (NBFCs). He explains how the revised LTV calculation, which includes accumulated interest, aims to mitigate risks and create a level playing field for all players in the sector.  Additionally, the discussion touches on the expanded scope for co-lending between banks and NBFCs, including non-Pradhan Mantri Jan Dhan Yojana (PMJDY) loans. This could potentially improve the distribution of credit and lead to better collaboration between banks and NBFCs, especially benefiting smaller NBFCs with strong distribution networks but limited balance sheet capacity.