The Reserve Bank of India (RBI) cut its key repo rate by a larger-than-expected 50 basis points (bps) on Friday, a third consecutive reduction, and slashed the reserve ratio for banks as muted inflation provided space for policymakers to focus on supporting economic growth.

On Friday, the Reserve Bank of India's Monetary Policy Committee (MPC) cut the repo rate by 50 basis points (bps) to 5.5%, marking the third consecutive rate cut this year.

Bankers in Mumbai welcome the RBI's rate cut and reduced cash reserve ratio. They believe these actions will boost credit growth. SBI Chairman CS Setty calls the policy innovative and a surprise. PNB's Ashok Chandra sees it as forward-looking,