While the common man heaved a sigh of relief after hearing that the RBI has decided to keep key rates unchanged for now, bankers expressed no surprise over the central bank's decision.

Individual borrowers — of car loans or home loans — and corporates have in recent times expressed concern over the rising cost of funds.

However, when Business Line approached bankers for comments, the Managing Director of Lakshmi Vilas Bank, Mr P.R. Somasundaram, simply said that the RBI's decision to maintain the status quo was on expected lines. “Things seem to be falling into place. There is a ‘slight' improvement in the off take of credit, but we will have to wait and see. The rupee exchange rate situation, though, is truly disturbing,” he added.

Both Dr N. Kamakodi, Chief Executive, City Union Bank, and Mr V. P. Iswardas, Managing Director, Catholic Syrian Bank, echoed Mr Somsundaram's statement, stating that they were not surprised over the RBI's decision to keep the rates unchanged.

“The options were limited, particularly in the present circumstances, where inflation is yet to fall to comfortable levels and industrial production figures not showing any comfort,” said Dr Kamakodi, referring to the pause in rates.

Mr Iswardas said that he foresaw some easing in the rates in January. “The Base Rate could also come to the rescue and improve the situation,” he added.

To a query on credit, he conceded the bankers were cautious on the lending front. “This could have a small impact on achieving lending targets per se , but bankers will not like to compromise on the quality of asset,” he said.

Banks such as LVB, CUB and CSB focus more on the retail and SMB segments rather than the corporate sector.

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