Indian Overseas Bank (IOB) has welcomed the Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25% and maintain its neutral monetary policy stance, saying the move reflects confidence in the resilience of the Indian economy despite an uncertain global environment.
The public sector lender said the central bank’s policy would help ensure predictable borrowing costs while sustaining credit flow to productive sectors, particularly micro, small and medium enterprises (MSMEs).
Banking system remains resilient
Indian Overseas Bank Managing Director & CEO Ajay Kumar Srivastava said the RBI’s policy decision comes at a time when global uncertainties persist due to geopolitical tensions in West Asia and evolving international trade policies.
“The RBI’s decision to hold the repo rate at 5.25% and continue with its neutral stance reflects confidence in the resilience of the Indian economy, even as global conditions remain volatile,” he said.
Srivastava noted that the RBI’s assessment of the banking system highlighted strong capital buffers, comfortable liquidity and improving asset quality, reinforcing confidence in the stability of India’s financial sector.
Predictable borrowing costs
According to Srivastava, the policy decision is expected to provide stability for borrowers by keeping lending costs predictable while ensuring continued availability of credit for businesses and individuals.
He also welcomed the RBI’s proposal to harmonise interest rate norms on advances across all regulated entities, saying the move would improve transparency and strengthen customer protection.
Srivastava further said the draft guidelines for resuming the licensing of urban co-operative banks would contribute to strengthening the country’s banking ecosystem.
“We remain committed to supporting sustainable credit growth as India continues to build on its position as the world’s fastest-growing major economy,” he added.
The RBI’s decision to maintain the policy rate is widely seen as balancing the need to support economic growth while keeping inflation within its target range amid global economic uncertainties.