25bps rate cut will create concerns about declining returns on FD

Mumbai, Dec 05

From depositors’ standpoint, a 25bps cut in repo rate will create concerns about declining returns on fixed deposits and other interest-bearing savings. Furthermore, this would likely push banks to trim deposit rates in the coming months, making it harder for savers to earn meaningful returns.

Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focused Alternative Investment Fund (AIF) says, “While lower rates may support broader economic growth, affluent investors and family offices often redirect capital toward higher-return products such as real estate–focused Category II AIFs to preserve real yields, thereby improving fundraising momentum for these funds. A lower interest-rate environment also reduces the cost of capital for developers and strengthens project viability, which in turn expands the opportunity for AIFs.”

The RBI’s decision to cut the repo rate by 25 bps is a significant boost for the ongoing real estate upswing.

Lalit Parihar, managing director, Aaiji Group, a Dholera-based real estate firm says, “By lowering the cost of borrowing, the move directly translates into more affordable home loans for both prospective buyers and existing customers in form of reduced EMIs.”

This improved affordability is expected to strengthen homebuyer sentiment across segments—from first-time homeowners to those considering upgrades or long-term investments.

With the demand for quality homes continuing to surge, driven by urban expansion, rising disposable incomes, and a preference for modern, well-planned living spaces, the rate cut provides just the right momentum for sustained growth. Developers stand to benefit as well, as easier credit conditions can improve liquidity, accelerate project execution, and support new launches in high-demand micro-markets.