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They also appreciated efforts steps taken by the apex bank to enhance credit flow to the NBFCs and classification of priority sector lending .B. Prasanna, Head, Global Markets Group, ICICI Bank, said: "The MPC surprised positively with a 35 bps cut given on the back of a continued growth slowdown. The MPC remains sanguine on inflation with projections up to Q1 FY2021 remaining well under 4 per cent while it downgraded GDP forecasts to 6.9 per cent with downside bias."Steps to enhance the credit flows to NBFCs and classification of certain sectors to the priority sector lending through NBFC on-lending are also welcome. Going forward, given the rhetoric that supporting private investment remains 'highest priority', we do not rule out further accommodation if growth impulses continue to be slow."Lakshmi Iyer, Chief Investment Officer (Debt) & Head Products, Kotak Mahindra Asset Management Company, is of the view that the RBI MPC has departed from the conventional rate action of 25 bps and its multiples and announced a 35 bps cut in repos rate."The accommodation in stance continues. The sluggish global economy, the fact that world over, central bankers are easing rates, and of course our economy also faces growth headwinds were among the key reasons that can be attributed to the rate cut. There seems to be a fervour to maintain comfortable liquidity in the banking system, which should be an additional support factor for bond yields, apart from cut in benchmark rates," she said."Going forward, the quantum and timing of rate actions (read cut as we are in accommodative stance) would be largely data dependent. With today's rate action, we have seen a cumulative rate reduction of 105 bps, and it is imperative to see this impact percolate to the real sector," Iyer added.Pushkar Mukewar, Co-Founder and Co-CEO of Drip Capital, a trade finance firm said: "The cut policy rates by 35 basis points sends out a clear signal that reviving growth is a priority. The RBI's move is in line with central banks across the world easing monetary policy."Madhavi Arora, Economist, Forex and Rates, Edelweiss Securities said that the MPC expectedly eased policy rates, albeit by 35bps, justifying that a 25bps cut would have been inadequate while a 50 bps would have been more than needed currently."The current growth-inflation mix has been favourable for counter-cyclical monetary stance and with inflation likely to remain sub 4 per cent in the foreseeable future, the MPC will likely focus on tackling weaker growth dynamics as output gap appears to have widened. We see scope for more easing, with MPC delivering another 25-50bps cut in the cycle further, contingent on data," she said.Umesh Revankar, MD and CEO of NBFC Shriram Transport Finance, said: "Permitting banks to lend through NBFC for priority sector lending would make this transmission faster and more efficient. This also would significantly improve the MSME functioning in the current environment and ultimately contribute to faster growth of economy."As the monsoon predication is very positive, the overall demand will pick up during Ganesh Chaturthi and would keep the momentum positive through the year."Thomas John Muthoot, CMD, Muthoot Pappachan Group, which is also an NBFC, said: "... banks have to pass on the benefit and should also actually lend. For instance, it's been really challenging for NBFCs to get funds from banks. The benefit of such cuts will not eventually reach the common man unless banks lend to retail NBFCs like us serving the deprived masses."Ravindra Sudhalkar, ED & CEO, Reliance Home Finance said: "The move to allow banks to lend to priority sectors, including to housing sector, of up to Rs 20 lakh loans, through NBFC arms will kickstart credit flow especially to affordable housing sector. For the consumers to feel the benefit of lower rates, the RBI will now need to step in for accelerating transmission of the rate cut."Narinder Wadhwa, President, Commodity Participants Association of India (CPAI) said: "The decision of a cumulative rate cut for the fourth time in a row was to ease the situation of liquidity tightening in the system. The regulator has retained its accommodative stance, which indicates its willingness to remain flexible till the economic conditions improve. The uptick in gold prices with the rate cut announcement indicates the investors confidence in this traditional asset during uncertainties."( With inputs from IANS )

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Business :Bankers, experts, NBFCs cheer 35 bps cut in rates

Bankers and experts on Wednesday hailed the RBI's unprecedented cut of 35 bps in repo rate acknowledging the economic slowdown and lending support through the fourth successive reduction in the rates. ...