IDFC First Bank CEO V Vaidyanathan said the latest cuts to the GST rates structure will lift India's consumption by Rs 2 lakh crore, citing reports. Speaking at Network18 Reforms Reloaded 2025 summit in Delhi, Vaidyanathan said 2027 will be a "lift off" year.
IDFC First Bank is looking at a 10 percent increase in growth of credit, he added. "Profitability of banking sector is expected to be good in 2027, credit and profitability both are expected to increase," he said.
He explained that the GST cuts on essential items from 5 percent to 0 percent may not bear much impact as people would continue consuming these products any way. However, the GST cut on some consumption products from 28 percent to 18 percent will have significant impact. "Car prices will be down 10 percent. Such reduction on a Rs 10 lakh-car is big money. In terms of EMI, it will translate to Rs 2,000 reduction per month per person for five years," he said.
"Profitability in 2027 will be much better. 2026 was a little suppressed. Not only credit growth, but profitability should look meaningfully better, at least for our bank," he added.
Speaking about expectations from the upcoming RBI MPC meet outcome, Vaidyanathan said the already existing measures including 100 bps cash reserve ratio cut will continue to ensure better liquidity in the banking sector. "For the banking system as a whole, I think this is probably the year when whatever negativity had to be factored has been factored. Next year would be better," he added.
Also read: Reforms Reloaded Live Updates
On September 3, the goods and services tax council cut levies on small cars, televisions, air conditioners, textiles and a range of household goods from September 22, in a major rate overhaul aimed at spurring consumption ahead of the festive season, even as Trump's tariffs threaten the country's exports.
On September 16, Moneycontrol reported that state-owned and private bankers are optimistic that banking system credit growth will remain in the range of the 11-15 percent in the current financial year. This is despite it hovering just over 10 percent at the end of the August.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
