Abhishek Sinha1 October 2025 | By Niveshvani.in
The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.50% in its October 2025 Monetary Policy Committee (MPC) meeting, but unveiled a set of regulatory and policy reforms designed to strengthen credit delivery, improve business ease, and support long-term growth.
According to Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP, one of India’s largest and most successful foreign distressed debt funds investing in the country, the policy demonstrates “pragmatic and growth-supportive direction” with a clear focus on financial sector efficiency.
Regulatory Reforms to Boost Credit Flow
Sawrikar noted that while there was no strong case for an immediate rate cut, the more important policy emphasis was on improving the efficiency of credit delivery and capital allocation.
“The RBI has announced a series of thoughtful and forward-looking measures. Expanding bank financing to include M&A activity, increasing limits on capital market exposures, and rationalising the large exposure framework are all constructive steps toward more efficient capital allocation,” he said.
Another key announcement was the reduction of risk weights for infrastructure lending by NBFCs, which is expected to lower the cost of capital for critical sectors and stimulate infrastructure investment.
External Sector: Flexibility and INR Internationalisation
On the external front, Sawrikar highlighted the RBI’s measures aimed at exporters and non-resident investors:
- The timeline for realisation of export proceeds in INR was extended from one month to three months, giving exporters greater operational flexibility and boosting INR invoicing.
- Planned rationalisation of FEMA and ECB regulations, along with simplification of non-resident business frameworks, marks a sustained push to align with global best practices.
- Steps to internationalise the Indian Rupee (INR) — including allowing neighbouring countries to take credit in INR — were described as timely and strategic.
Growth-Supportive and Strategic
Overall, Sawrikar stressed that the latest MPC outcome was less about rate action and more about structural reforms.
“Overall, the direction is pragmatic, growth-supportive, and clearly aimed at improving financial sector efficiency and business ease,” he said.
✅ Commentary Courtesy: Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP
