The earnings-meets-policy fortnight opened with the two largest private banks beating on both lines that matter: credit growth at 16 percent annualised — retail and MSME led — and net interest margins holding as deposit competition finally crests.
The asset-quality story was boring, which is banking's highest compliment: gross NPAs at cycle lows, war-quarter stress that never materialised (the corporate hedging discipline our macro coverage tracked did its work), and provisioning released rather than rebuilt.
For Tuesday's MPC, the results read as a permission slip. The transmission worry — that a cut would vanish into margin defence rather than reach borrowers — weakens when deposit costs have peaked on their own; the credit-demand worry dissolves at 16 percent. The swaps market moved the cut probability from seventy to eighty-two percent within the hour.
The commentary to watch in the remaining calls: unsecured retail's growth pace (the RBI's one flagged discomfort) and MSME utilisation ahead of the GST transition — the working-capital cycle that September 22 will churn.
Banks report the economy before statisticians do. Their report says: cut. Coverage continues on our economy desk.
