By Business Desk,Mohammad Haris,News18

Copyright news18

The Reserve Bank of India (RBI) has announced a series of measures aimed at strengthening banks’ balance sheets and boosting credit flow. Bankers welcomed the announcements, saying they would support growth and improve the financial ecosystem.
Indian Overseas Bank MD & CEO Ajay Kumar Srivastava said the focus on expanding the bouquet of services for basic bank savings deposit accounts through mobile and internet services will have a positive impact on consumers.
After the RBI announcement on Wednesday, no-frills account holders can now use the digital banking facility free of cost.
ESAF Small Finance Bank MD and CEO K Paul Thomas said with inflation remaining at a historic low, the space to support growth remains wide, even as inflation trends stay a key monitorable. “The overall message is clear — future policy will be data-driven, and the outlook remains supportive of growth despite global uncertainties…these measures are expected to further boost rural demand and investment activity, creating a favourable environment for sustainable growth,” he said.
State Bank of India Chairman CS Setty said, “The policy statement was an authoritative one towards unveiling of market reforms and moving beyond the rate actions. The move towards a risk-based deposit insurance premium will facilitate significant improvement in the bottom line of sound banks”.
The withdrawal of framework related to specified borrowers and allowing M&A financing by Indian banks are growth accretive and will foster incremental credit flow from banks, he added.
Extension of timelines for repatriation from foreign currency accounts of Indian exporters in IFSC and forex outlay for Merchanting Trade Transactions, besides simplification of reconciliation processes in EDPMS/IDPMS portals, are welcome steps, as they will further enhance ease of doing business for the export sector, he noted.
Grant Thornton Bharat partner Vivek Iyer said, “The measures towards enhancing customer satisfaction and protection, improved use of the rupee across cross-border transactions will strengthen the larger financial ecosystem in terms of acceptability and improved currency outlook over the medium term. Meanwhile, the GST reforms are providing fiscal support to boost the economy, giving the RBI more flexibility, and reducing the need to rely solely on monetary easing to boost demand. “Based on current trends, we expect the RBI to hold rates in the upcoming MPC meeting, with the possibility of a cut in the subsequent review.”
The RBI’s decision to maintain the repo rate at 5.5 per cent reinforces stability in the lending environment, Kotak Mahindra Bank Head-Housing Finance Business Manu Singh said.
RBI’s Measures Announced On October 1
Banking Sector Resilience

ECL provisioning framework for all Scheduled Commercial Banks & AIFIs from Apr 2027, glide path till Mar 2031.
Basel III capital norms effective Apr 2027; draft on Standardised Credit Risk Approach soon.
Risk-based deposit insurance premium to replace flat rate.
Overlap restrictions between banks and group entities removed.
Banks allowed to finance corporate acquisitions.
Lending cap against shares raised to Rs 1 crore (from Rs 20 lakh); IPO financing limit to Rs 25 lakh (from Rs 10 lakh).
2016 framework discouraging lending to large borrowers withdrawn.
Lower risk weights for NBFC lending to quality infra projects.
Discussion paper to reopen licensing for Urban Co-op Banks.
Basic savings accounts to include mobile/internet banking.
Stronger internal ombudsman system.
RBI Ombudsman Scheme widened to cover rural co-op banks.
Indian banks can lend in INR to non-residents in Bhutan, Nepal, Sri Lanka for trade.
Transparent reference rates for major currencies.
SRVA balances allowed for investment in corporate bonds and CPs.