Budget Borrowing Surprise: Yields May Rise, RBI Support Expected, Says IndusInd Bank CEO

• IndusInd Bank CEO Rajiv Anand notes the Union Budget's ₹17.2 lakh crore gross borrowing is higher than anticipated, potentially nudging bond yields up.
• Anand expects the RBI to manage the supply smoothly through OMOs and switches, despite a likely short-term market reaction.
• The fiscal math, with 10% nominal GDP growth, is deemed credible, and net borrowing figures are not alarming.
• A new Banking Committee will recommend reforms, including ownership rules and voting rights, shaping India's banking sector for the next 25 years.
• Recent transactions (SMBC–Yes Bank, Emirates–RBL) suggest regulators are open to rethinking ownership structures, potentially leading to more consolidation and foreign participation.

Why It Matters: Budget's higher borrowing may cause short-term yield hikes, but RBI support and credible fiscal math are expected.