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Economic Times
10 hours ago
- Business
- Economic Times
Can Indian economy thrive amidst market slowdowns and tech layoffs? A Balasubramanian answers
A Balasubramanian, MD & CEO, ABSL AMC, says Indian markets are consolidating amidst favorable interest rates and strong agricultural output, boosted by a good monsoon. The upcoming festival season is expected to further stimulate the rural economy. Government infrastructure spending continues to drive cement and steel sales. While bilateral trade deals offer potential benefits, technological disruptions, exemplified by TCS layoffs, are causing some market caution. Is a bit of a slowdown being seen at this moment of time? A Balasubramanian: If you look at various lead indicators, except for a few of the high frequency indicators like cement and steel, in general we are seeing some bit of slowdown which of course also reflects in the IIP numbers. The narrative has come from the financial sectors, especially one of the leading finance companies have said that MSMEs have been slowing down and therefore there could be a possibility of delinquencies. That is not uniform and each company has different narratives to give. But broadly people are a bit cautious and there has been some bit of pressure in terms of lending growth, more than anything else, as the lending growth becomes very aggressive, then naturally they will have enough earnings. They will manage some of the other challenges that they may have. But the current narrative is coming from financial sectors, largely related to the lending growth being lower than what they could have otherwise done. Certain segments of the market have done pretty well. Banking has done pretty well because the cost of financing has come down, thanks to the rate cut, and definitely the cost of borrowing has been coming down, CASA ratios have come down and even from the borrowers point of view, being linked to the repo rate, the lending rates have come down. The MCLR is also down by about 50 basis points. We cannot come to judgment on the basis of the one quarter numbers. We still have a long way to go. This quarter, keeping in mind the current situation, the companies also must be playing a little cautious and making a little higher provision so that they will be able to manage things as we move forward in the next two-three quarters. Where do you think that is going to finally settle for the markets because there is still a big question mark on what is going to happen in the tariff deal with the US? We have seen a little bit of a spike in crude prices overnight, but it's still pretty much at a comfortable level. Is it going to translate into a sedate market or will the early onset of the festive season resurrect it? A Balasubramanian: Yes, of course, one, leave aside the earnings for the time being. Earnings are keeping the market under check as well as whatever the tariff outcome is. But if you leave that aside, clearly for the rest of the financial year, definitely the interest rate is going to remain favourable and agriculture crop, not even the sowing, even the agriculture output that has come in the last one, one-and-a-half months, have been pretty good and the monsoon has spread across the country well. The water levels are pretty good and in the next two-three quarters, visibility from agriculture income going up quite significantly is also high. The festival season has been supported by growth coming back with a low interest rate state regime. We will see the rural economy getting a kickstart. The festival season is starting early and we will have to see how it shapes up. We will probably see a good momentum coming back. We are not seeing any slowdown in terms of government-led infrastructure spending. We are continuing to see that momentum continuing and that is why cement sales and steel sales are up, mainly driven by the government's continued focus on infrastructure building. Therefore, the market is going through a consolidation phase. It is good to have markets go through a consolidation phase. It is preparing for some bit of time value correction which will also make the valuation attractive. As the number starts coming a little better, you would probably see that improvement coming back. The bilateral trade deals the US has entered into so far has proved to be favourable for both the countries. I would presume India too can expect a similar fate. But, we cannot speculate on this. We are definitely seeing a bit of slowdown where even a company like TCS is going for large-scale layoffs. This has nothing to do with the government and has something to do with the technological disruptions and this to some extent would make people a bit cautious. But when you say that the agri income is expected to inch up going ahead, along with that, we have already seen many factors that could be at play and some of the other FMCG companies also highlighting that. The rural economy was doing well but it is the urban economy that is showing signs of improvement. What within the consumption basket can one look at now? Can it be autos? Can it be tractor sales? Can it be some of the staples or discretionary plays? A Balasubramanian: Largely, it starts from the autos. Two-wheelers have been doing well, but at the same time, in the last few months, it also has gone through a marginal sales growth. But two-wheelers basically address the common man's needs across the country, including rural as well as urban India, where we should see some kind of pickup. The second is consumer spending, especially in the festival season. Generally the household spending in terms of refurbishing as well as other household items will also improve as the demand generally goes up. Financing will also be made available for this segment of the market. Therefore, even in consumer durables, we should see some kind of a pick up as a result of the increase in spending in the coming festival season. The tractor numbers are far better than what was expected, almost about 6% registration growth has come which in some sense is good as people are spending on agriculture and that is reflecting in the growth momentum. There are no true indicators of consumption pick-up. The true indicator will come from autos as well as consumer durables. How should market participants draw their portfolio? A Balasubramanian: Global uncertainty is not just driven by tariffs and now is coming to an end. The other important factor from a global market point of view is the disruption in the technology world and the oil prices which have been lying low and could also have its own impact. The general slowdown that we are witnessing in the global market could probably keep it under check for some more time given the fact nowhere in the world we can say the valuations are very cheap and therefore we will always have that holding back the investment decisions. Having said that, I would say there is a significant slowdown. The Fed governor would probably cut more aggressively than what he had done in the last few years. In the last six months, no rate cut has come. The US will not hesitate to cut the rate quite substantially to boost the overall sentiment and get back on the growth path. Therefore, in the next three-four months, we will have to keep a close watch on how each of the moving parts will drive the sentiment.
Time of India
10 hours ago
- Business
- Time of India
Can Indian economy thrive amidst market slowdowns and tech layoffs? A Balasubramanian answers
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads MD & CEO,, says Indian markets are consolidating amidst favorable interest rates and strong agricultural output, boosted by a good monsoon. The upcoming festival season is expected to further stimulate the rural economy. Government infrastructure spending continues to drive cement and steel sales. While bilateral trade deals offer potential benefits, technological disruptions, exemplified by TCS layoffs, are causing some market you look at various lead indicators , except for a few of the high frequency indicators like cement and steel, in general we are seeing some bit of slowdown which of course also reflects in the IIP numbers . The narrative has come from the financial sectors, especially one of the leading finance companies have said that MSMEs have been slowing down and therefore there could be a possibility of delinquencies. That is not uniform and each company has different narratives to give. But broadly people are a bit cautious and there has been some bit of pressure in terms of lending growth, more than anything else, as the lending growth becomes very aggressive, then naturally they will have enough earnings. They will manage some of the other challenges that they may have. But the current narrative is coming from financial sectors, largely related to the lending growth being lower than what they could have otherwise segments of the market have done pretty well. Banking has done pretty well because the cost of financing has come down, thanks to the rate cut, and definitely the cost of borrowing has been coming down, CASA ratios have come down and even from the borrowers point of view, being linked to the repo rate, the lending rates have come down. The MCLR is also down by about 50 basis points. We cannot come to judgment on the basis of the one quarter numbers. We still have a long way to quarter, keeping in mind the current situation, the companies also must be playing a little cautious and making a little higher provision so that they will be able to manage things as we move forward in the next two-three of course, one, leave aside the earnings for the time being. Earnings are keeping the market under check as well as whatever the tariff outcome is. But if you leave that aside, clearly for the rest of the financial year, definitely the interest rate is going to remain favourable and agriculture crop, not even the sowing, even the agriculture output that has come in the last one, one-and-a-half months, have been pretty good and the monsoon has spread across the country well. The water levels are pretty good and in the next two-three quarters, visibility from agriculture income going up quite significantly is also festival season has been supported by growth coming back with a low interest rate state regime. We will see the rural economy getting a kickstart. The festival season is starting early and we will have to see how it shapes up. We will probably see a good momentum coming back. We are not seeing any slowdown in terms of government-led infrastructure spending. We are continuing to see that momentum continuing and that is why cement sales and steel sales are up, mainly driven by the government's continued focus on infrastructure the market is going through a consolidation phase. It is good to have markets go through a consolidation phase. It is preparing for some bit of time value correction which will also make the valuation attractive. As the number starts coming a little better, you would probably see that improvement coming back. The bilateral trade deals the US has entered into so far has proved to be favourable for both the countries. I would presume India too can expect a similar fate. But, we cannot speculate on are definitely seeing a bit of slowdown where even a company like TCS is going for large-scale layoffs. This has nothing to do with the government and has something to do with the technological disruptions and this to some extent would make people a bit it starts from the autos. Two-wheelers have been doing well, but at the same time, in the last few months, it also has gone through a marginal sales growth. But two-wheelers basically address the common man's needs across the country, including rural as well as urban India, where we should see some kind of second is consumer spending, especially in the festival season. Generally the household spending in terms of refurbishing as well as other household items will also improve as the demand generally goes up. Financing will also be made available for this segment of the market. Therefore, even in consumer durables, we should see some kind of a pick up as a result of the increase in spending in the coming festival tractor numbers are far better than what was expected, almost about 6% registration growth has come which in some sense is good as people are spending on agriculture and that is reflecting in the growth momentum. There are no true indicators of consumption pick-up. The true indicator will come from autos as well as consumer durables.: Global uncertainty is not just driven by tariffs and now is coming to an end. The other important factor from a global market point of view is the disruption in the technology world and the oil prices which have been lying low and could also have its own impact. The general slowdown that we are witnessing in the global market could probably keep it under check for some more time given the fact nowhere in the world we can say the valuations are very cheap and therefore we will always have that holding back the investment said that, I would say there is a significant slowdown. The Fed governor would probably cut more aggressively than what he had done in the last few years. In the last six months, no rate cut has come. The US will not hesitate to cut the rate quite substantially to boost the overall sentiment and get back on the growth path. Therefore, in the next three-four months, we will have to keep a close watch on how each of the moving parts will drive the sentiment.
Time of India
7 days ago
- Business
- Time of India
Private banks' yields on advances dip on faster rate transmission
Private banks recorded a sharper fall, primarily because they have a higher share of loans priced on the external benchmark linked rate (EBLR) in their portfolio. EBLR adjusts more rapidly to policy changes than the marginal cost of funds-based lending rate (MCLR), the benchmark that most PSB loans are linked to. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads MUMBAI: Private sector banks have been quicker than their public sector counterparts in passing on the Reserve Bank of India's policy rate cuts to on loans for private banks dropped by 20-83 basis points (bps) in the quarter ended June 30 from three months prior. For public sector banks (PSBs), the decline was limited to 2-22 bps, based on the quarterly financial statements of central bank has cut policy repo rate by 100 basis points since February, with three-fourths of this reduction being done in the April-June banks recorded a sharper fall, primarily because they have a higher share of loans priced on the external benchmark linked rate (EBLR) in their portfolio. EBLR adjusts more rapidly to policy changes than the marginal cost of funds-based lending rate (MCLR), the benchmark that most PSB loans are linked 87% of private banks' floating rate loans are on EBLR as of the end of March 2025, compared with 46% for state-run banks, according to the RBI data. The share of loans linked to MCLR, where transmission works with lag effect and depends on the fall in incremental cost of deposits, is 12% for private banks and 49% for banks also saw a 0-20 bps decline in deposit costs during the quarter, whereas PSBs reported a relatively modest drop of 6-15 bps, the June-quarter numbers HDFC Bank , the cost of funds fell by about 10 bps, while loan yields declined by 20-22 bps. About 70% of the loan book of the country's largest private sector bank is linked to EBLR; the remaining is MCLR-based."These (EBLR-based) are floating-rate loans, so they reprice faster than the cost of funds," said HDFC Bank chief financial officer Srinivasan Vaidyanathan. "We manage our cost of funds by competitively pricing our savings and time deposits. The market hasn't fully priced in the 100-bps reduction in the policy rate between February and June. New deposit renewals will come in at lower rates." ICICI Bank reported a 33-bps sequential drop in loan yields to 9.53%. Axis Bank 's cost of funds came in at 5.39%, down 11 bps quarter-on-quarter and five bps year-on-year. The cost of deposits declined by 12 bps, while loan spreads narrowed by 13 bps."We've demonstrated disciplined increases in cost of funds over the last eight quarters," Axis Bank managing director and chief executive Amitabh Chaudhry said. "Our confidence in the franchise has allowed us to take proactive steps on savings and term deposit rates, resulting in an 11-bps sequential drop in cost of funds." Yes Bank saw its loan yields decline by 20 bps sequentially to 9.9%, with a corresponding fall in deposit costs to 5.9%. The bank's overall cost of funds fell by 10 bps to 6.3%. "The rate cut we implemented on savings account balances helped us align our deposit costs with the decline in loan yields," MD and CEO Prashant Kumar said, adding: "While we expect continued pressure on loan yields due to the repo rate cut, our focus remains on mitigating the impact."According to Saurabh Bhalerao, associate director at CareEdge Ratings, while private banks are seeing upfront pressure on margins mainly because of EBLR loans and competition, it will play out over the next two-three quarters for PSBs as MCLR rates fall with a lag. "Banks would try to make up for the pressure on NIMs (net interest margins) by managing the spreads as well as the cost of funds," he said.
The Hindu
11-07-2025
- Business
- The Hindu
Indel Money inducts ex RBI ED, LIC MD into its board
Indel Money, a gold loan NBFC, has announced the appointment of Parvathy Sundaram, Former Executive Director, Reserve Bank of India (RBI) , and Venugopal Bhaskaran Nayar, former Managing Director of Life Insurance Corporation of India (LIC), as Independent Directors on its Board. Umesh Mohanan, ED & CEO, Indel Money, said, 'Their wealth of experience in regulatory and financial services will be instrumental as we chart our next phase of growth and continue building leadership in core retail, secured asset categories.' Ms. Sundaram was directly involved in the Asset Quality Review (2015–17), the shift to Risk-Based Supervision, and the development of a framework for small foreign banks at the RBI. She also contributed to the revised Prompt Corrective Action (PCA) guidelines and participated in RBI working groups on MCLR and the Public Credit Registry. Mr. Nayar has over 38 years of experience in financial services, including 36 years with LIC. He retired as Managing Director in May 2019. Since retirement, he has served as an Independent Director at SBI Life Insurance and on the boards of institutions including SBI (as an Independent Director till 2024), NCDEX, LIC Nepal, LIC Bangladesh, and LIC International.
Business Upturn
07-07-2025
- Business
- Business Upturn
Karur Vysya Bank cuts MCLR by up to 25 bps across tenures, effective July 7
By Aditya Bhagchandani Published on July 7, 2025, 11:27 IST Karur Vysya Bank announced a reduction in its Marginal Cost of Funds Based Lending Rates (MCLR) across all loan tenures, effective July 7, 2025, according to a regulatory filing with NSE and BSE. The move is expected to lower borrowing costs for customers across various loan products linked to MCLR. As per the disclosure, the overnight MCLR has been reduced by 10 basis points (bps) from 9.35% to 9.25%. The one-month MCLR has come down from 9.50% to 9.40%, while the three-month MCLR saw the sharpest cut of 25 bps, dropping from 9.65% to 9.40%. Similarly, the six-month and one-year MCLRs have both been reduced from 9.80% to 9.55%, a cut of 25 bps each. The revised rates are as follows: Overnight: 9.25% One Month: 9.40% Three Months: 9.40% Six Months: 9.55% One Year: 9.55% The bank's move comes at a time when the broader interest rate environment remains stable, and banks are competing to offer more attractive rates to borrowers. This cut is expected to benefit both retail and corporate borrowers with loans linked to the bank's MCLR. Karur Vysya Bank communicated the revision under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The reduction in MCLR is in line with the industry trend of marginal easing in lending rates and could help support credit growth in the coming quarters. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
