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Informist, Friday, Dec. 5, 2025

 

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--RBI Malhotra: Not looking at credit growth at 2x of GDP growth
--RBI Malhotra: We don't target any particular growth rate
--RBI Malhotra: Going forward, deposit rates will moderate
--RBI Malhotra: Deposit rates to moderate to some extent after rate cut
--RBI Swaminathan: No credit indicators creating problems for us right now
--RBI Swaminathan: Overall retail loans have not shown deterioration
--RBI Malhotra: Working on portal to identify accts with unclaimed deposits

 

MUMBAI – The Reserve Bank of India does not maintain targets for banks' credit growth, Governor Sanjay Malhotra said in the post-monetary policy press conference. "We don't target any particular growth rate...monetary policy has a role only in the short term," he said, dismissing assumptions that credit growth should follow a fixed multiplier over GDP.

 

The RBI does not follow any metric that says bank credit should grow at twice the pace of GDP, Malhotra said, asserting that the central bank neither expects nor targets such ratios. "I don't know where you get the 2x figure...Last 10 years it's been more or less 1x...We don't target any particular growth rate for the economy," Malhotra said, stressing that structural factors, and not monetary policy, drive long-term credit expansion.

 

Malhotra added that with inflation remaining benign, the recent repo rate cut is expected to translate into softer deposit costs. "We do expect that going forward, especially after this repo rate cut, deposit rates will, to some extent, moderate," he said, noting that real interest rates are currently elevated for both borrowers and savers.

 

RBI Deputy Governor Swaminathan J. said the central bank sees no emerging stress in credit quality, particularly in retail lending--an area under greater scrutiny in recent months. "There are no indicators at this point in time which are creating a concern for us...overall retail loans have not shown any deterioration," he said. While unsecured personal loans saw a slight uptick in slippages, he said it was not meaningful enough to warrant regulatory action.

 

The RBI is also advancing efforts to clean up the large pool of unclaimed deposits parked with banks. Malhotra said the central bank is working on a more user-friendly portal to help customers locate such accounts and speed up settlements. "We are also looking at a portal...to help in identifying the accounts and reclaiming unclaimed assets," he said.

 

The Monetary Policy Committee Friday lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision. The committee retained its 'neutral' policy stance but external member Ram Singh was of the view that the stance be changed to accommodative.  End

 

Reported by Kabir Sharma

Edited by Ashish Shirke

 

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