India’s RBL Bank, Aditya Birla Capital, and SBI Cards saw up to a 5% rally in share prices on June 6 as the Reserve Bank of India signaled easing stress in unsecured loans and credit card portfolios. However, the central bank remains cautious about microfinance risks and continues its monetary easing with a 50-basis point repo rate cut.
Shares of major Indian financial entities including RBL Bank, Aditya Birla Capital, and SBI Cards and Payment Services surged up to 5% during intraday trading on June 6, following key statements from the Reserve Bank of India (RBI) during its second bi-monthly monetary policy address for FY2025-26.
The Reserve Bank of India (RBI), headquartered in Mumbai, is India’s central banking institution overseeing monetary policy and financial regulation. RBI Governor Sanjay Malhotra stated that the stress previously observed in unsecured personal loans and credit card receivables has “abated,” offering a much-needed boost to investor confidence in retail lending-focused institutions.
However, Malhotra cautioned that pressure remains in the microfinance segment. “Banks and NBFCs operating in these areas are recalibrating their business models, improving credit checks, and intensifying collection efforts to avoid future risks,” he said.
Data from the RBI showed that the growth in retail bank lending has decelerated to 11.6% in FY2025 from a high of 27.6% in FY2024. This pullback was driven by regulatory measures such as higher risk weights for unsecured loans and the natural moderation following a high-growth phase.
While these developments helped boost the stocks of RBL Bank, Aditya Birla Capital, and SBI Cards, credit risk concerns still persist. Rating agency Moody’s has warned that unsecured retail loans are likely to remain riskier than secured loans for the coming quarters. Between FY2021 and FY2024, unsecured personal loans and credit card borrowings rose at compounded annual growth rates of 22% and 25%, respectively.
In a broader monetary move, the RBI cut the repo rate by 50 basis points, bringing it down to 5.5%—a full percentage point drop over the past three meetings. Additionally, the central bank slashed the Cash Reserve Ratio (CRR) by 100 basis points, injecting liquidity worth ₹2.5 lakh crore (approximately USD 30 billion) into the system. Malhotra cited declining inflation, which touched a six-year low in April, as the main driver behind this bold policy move.
This monetary easing is expected to lower borrowing costs and increase credit flow to consumers and businesses alike, further stabilizing India’s lending environment.
Also Read: Big Cut, Bigger Implications: Repo Rate Hits 5.5%
