Shares of Non-Banking Financial Companies (NBFCs) are expected to remain in the spotlight after the Reserve Bank of India (RBI) announced a 25 basis point cut in the benchmark repo rate to 6.00% and shifted its policy stance from “neutral” to “accommodative” during the first bi-monthly monetary policy meeting for FY26.
The Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, concluded its three-day meeting today, April 9, and unanimously voted in favour of the rate cut and stance change. In addition to the repo rate reduction, the RBI slashed the Standing Deposit Facility (SDF) rate to 5.75% and the Marginal Standing Facility (MSF) rate to 6.25%, effective immediately.
NBFCs such as Bajaj Finance, Cholamandalam Investment, Aditya Birla Capital, Manappuram Finance, Muthoot Finance, Sundaram Finance, Poonawalla Fincorp, CreditAccess Grameen, and Jio Financial Services may benefit from lower cost of borrowing, which could enhance their lending capacity and support credit growth in the coming quarters.
What does an accommodative stance mean?
An accommodative stance in monetary policy refers to a strategy aimed at supporting economic growth. Central banks adopt this stance when they want to stimulate the economy—usually by lowering interest rates—so that borrowing becomes cheaper and demand increases.
In contrast:
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A tightening stance involves increasing interest rates to combat inflation by reducing spending and credit.
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A neutral stance implies a wait-and-watch approach, allowing the central bank the flexibility to raise or lower rates depending on how the economic situation unfolds.
With this change in stance, the RBI has signaled that going forward, in the absence of new economic shocks, the Monetary Policy Committee is likely to either maintain the status quo or implement further rate cuts.
On the inflation front, he added, “While the sharper-than-expected decline in food prices has given us comfort, we remain vigilant to possible risks from global uncertainty and weather disruptions. MPC noted that inflation is currently below target, supported by a huge fall in food prices. Moreover, there is a decisive improvement in the inflation outlook. As per projections, there is now greater confidence of durable alignment of headline inflation with the target of 4% over the 12-month horizon.”
