Even as Reserve Bank of India Governor Raghuram Rajan said that transmission of policy rates is not happening significantly, bankers and finance industry captains seem to welcome the central banks rate call. All of this could mean that interest rates across products in the economy could remain elevated at least for a couple of more months.
Chanda Kochhar, MD & CEO, ICICI Bank , said, “The policy signals RBI’s resolve to firmly contain inflation and inflationary expectations, while responding to positive developments in inflation and fiscal consolidation. The statement that a change in monetary policy stance is likely early next year if the current positive trends continue is very welcome.”
Umesh Revankar, MD, Shriram Transport Finance Co , said, “Though it seems that the RBI has dashed the hopes of rate cuts in 2014, we appreciate the patience of the regulator in containing inflation within permissible limits… But still our sense says the year 2015 broadly should be the year of softening of interest rates, which will bring a relief and improve corporate sentiment further.”
George Alexander Muthoot, MD, Muthoot Finance Ltd , said, “The regulator sounded cautiously optimistic in the current policy review, which indicate that the inflation expectations are within their acceptable levels and the focus may now move towards driving growth. India Inc has been patient equally with the regulator, but a relief on the cost of funds is awaited eagerly, which should help them to improve financial health and plan for the next leg of growth. So in summation the interest rate scenario should change for good in 2015.”