Will the RBI rate cut this time around be useful in boosting lending?

Frankly, it is unlikely as banks are already stressed by the EMI moratorium being extended to 6 months. For credit to pick up you need consumer confidence and business willingness to invest. Most businesses are not too keen to invest unless there is clarity on when the economy will be back in full steam. The RBI has now cut rates by 115 bps in the last 2 months with little to show by way of credit growth. The first 75 bps was enough to indicate to markets that the RBI was committed to dovish monetary policy. The latest round of 40 bps rate cut will not add much value. On the contrary, it has just limited the monetary options for the RBI. At this point, the economy needs manufacturing tax incentives, cuts in personal taxes, big infrastructure spending and liquidity for stressed NBFCs. Monetary policy has played its role adequately. It is time to let the fiscal policy do the rest of job. Rate cuts are hardly an answer at this point of time.