RBI decided to keep the repo rate @ 6.5% (unchanged)
your arguments if its good or bad for the banks?
I would have asked for logic if they had changed the rate. 
I felt they should have hiked - loan growth is not slowing. Almost all the Banks are green on balance sheets
And how do you explain the pause in the previous policy?
Interest rates won’t increase from here. Infant I won’t be surprised to see rate cut by the end of the year.
If demand is not slowing, inflation wont keep dipping - it will rise back up!. Or else the Govt. will have to slash fuel rates to bring down prices.
Agree 100% that they will have to cut the rates soon after the Rs2000 exercise !
In my opinion, rate cuts should happen irrespective of 2000s withdrawal. It makes no difference on a long run. People have deposited 2000s as business cash after changing their denomination.
In business people receive cash of other denominations also. They change that with unaccounted money of 2000s. Deposit that money in bank and keep other denominations as unaccounted.
I don’t see liquidity increasing at all. Unaccounted money will never come back to the system.
80% people prefer to deposit wrt exchange. Lets wait for the end of Sep to see the real numbers !
Let me put my two cents into this.
Inflation is projected at 5.1% for 2024. One of the mandate of RBI is to control inflation. They have projected inflation as follows
RBI INFLATION OUTLOOK
Period Projection Earlier
FY24 5.1% 5.2%
Q1FY24 4.6% 5.1%
Q2FY24 5.2% 5.4%
Q3FY24 5.4% 5.4%
Q4FY24 5.2% 5.2%
Until and unless, there is a real fall in inflation, there is no scope for RBI to reduce the rates. There will not by any increase but the rates might remain constant until there is a drastic fall in inflation below 4%. Notwithstanding the above, no one expected RBI to keep the rate constant in the last MPC, everone expected a 0.25% increase. Next year is an election year so anything can happen. My gut feeling is that the rates will remain constant as no increase will be considered positive for this year despite the inflation rate forcasted is above 5% whilst RBI mandate is to bring it down below 4%.
Now, what happens to bank, they cannot pass on the hike on their lending portfolio, which means total income may not increase due to default increase in rates, but their operating profit might widen as they they might trim down the deposit rates as there is eneough liquidity. RBI in their statement said that there is surplus liqudity in the system due to 2000 rs getting deposited into the banking system. As per RBI 1.8 lack crore of the 2000 rs has come back into the system - this only represents 50%. There is still another 50% which is expected to come back into the system by September. Overall it will be beneficial for the banks.
Doesn’t matter. Unaccounted money remains unaccounted. Exchange is not done in banks. It’s done in businesses.
I am rooting for a 25bps RBI hike this week. Hasnt inflation “returned from the dead?”
But I doubt that will happen. In fact by this year ended I wont be surprised to see rate cuts.
Possible. Food inflation due to abnormal rains may dampen the sentiment. There’s shortage building up in almost every food commodity right from rice to vegetables like tomato.
the greatest paradox is, rate hike does not really impact the informal sector 
(directly).
I doubt if it really helps the formal sector too much too. 
definitely not in the short run. But macros get affected directly. Gsecs, currency markets all keep a very close eye. Plus FIIs too