In view of the growth-oriented Union Budget, low inflation and India-US trade agreement, the Monetary Policy Committee (MPC) of RBI will begin its three-day meeting from Wednesday. Experts believe that RBI has reduced the repo rate by 1.25 percent since February. Since there are no serious concerns over growth or inflation, it can maintain status quo on rates. Madan Sabnavis, Chief Economist, Bank of Baroda, said the MPC is likely to stick to the repo rate and this could also be the end of the rate-cut cycle. At the same time, ICRA’s Chief Economist Aditi Nair said, the pause is appropriate at this time, so that the retail inflation for January 2026 and the GDP figures for 2023-24 to 2025-26 can be assessed. However, low inflation gives the RBI scope to consider rate cuts. AUM of affordable housing finance companies will decline. The assets under management i.e. AUM of housing finance companies lending to affordable housing projects may decline to 21 percent during the current financial year 2025-26. During the financial year 2024-25, the AUM of affordable housing finance companies was 23 percent. Domestic rating agency Crisil said in a report on Tuesday, the pace of growth in the AUM of these companies will remain stable at 20-21 percent in the coming financial year 2026-27 also. The report said growth in the loan against property (LAP) segment may also decelerate from 30 per cent to 24-26 per cent in the current financial year as lenders are readjusting underwriting following pressure on asset quality of certain types of borrowers. This will lead to a slight increase in credit costs.
