How do bankers view RBI’s MPC announcements

Dinesh Kumar Khara, Chairman, State Bank of India said, “The RBI policy announcement is a clear affirmation that the Indian economy is poised for a stable inflation and high growth regime with the possibility of growth breaching 7 per cent for the third successive year. The measures regarding liquidity will facilitate better fund management by banks. The enhancement of limits under UPI for education and healthcare will ensure that UPI truly emerges as a public good.”

A K Goel, Chairman, Indian Banks’ Association (IBA) and MD & CEO, Punjab National Bank said,“RBI’s estimates on the first three quarters of GDP for FY25 are well above 6 per cent. Higher growth projections of the economy are quite positive for the banking sector as it indicates increase in the level of economic activities which inturn signals robust credit growth.

Recurring food price shocks are impeding the ongoing disinflationary process and RBI highlighted the need for sustaining the disinflationary process and to anchor the inflation trajectory to the lower end of 4.0 per cent.”

Zarin Daruwala, Cluster CEO, India and South Asia markets, Standard Chartered Bank, says, “Updated macro forecasts bode well for the economy with inflation forecast to soften to 4 per cent by Q2 FY25 and growth likely to head higher to 7 per cent. Allowing reversal of liquidity adjustment facility (LAF) on holidays and weekends will enable banks to better manage customer flows and this move also aligns well with RBI’s 24x7 payments framework.”

Ashu Khullar, CEO, Citi India, said, “While the decision to keep the repo rate unchanged underscores that inflation management continues to be the top priority, particularly in the broader context of global macroeconomic uncertainties, the upward revision in GDP growth forecast instils confidence in the India opportunity among both domestic and global investors. A unified regulatory framework will provide transparency, and enhancements on UPI transaction limit and e-mandate limits for recurring online transactions will give a leg up to digital transactions.

PR Seshadari, MD and CEO, South Indian Bank, noted that, “Through the MPC actions, RBI has managed to keep the Indian economy resilient, which has translated into a growth momentum in a gloomy global backdrop. The MPC team’s foresight in prioritising inflation control by draining out excess liquidity through measured rate hikes and pauses is commendable. It has worked well, alongside supply-side measures taken by the government, to tame the stubborn inflation.

Virat Diwanji, Group President and Head - Consumer Bank, Kotak Mahindra Bank, said, “With the robustness seen across the economy, including the likelihood of a lesser drag on the exports front and private consumption remaining buoyant, the higher GDP target seems achievable. Given this assured rate environment, the loan demand will continue to be strong even though there are concerns about the impact of the risk weightage changes on unsecured lending that might lead to a slowdown there. For the consumer banking, the scenario looks very promising. The rural consumption is improving which adds to the resilience of the Indian economy.”

Pralay Mondal, MD and CEO, CSB Bank, said, “It’s a very prudent move to not change the policy stance when the steps taken in the past are still being absorbed. The move to create a Fintech repository and increasing limits of UPI for specified categories helps growth and shows the increasing confidence of the regulator in the UPI framework. Reversal of SDF and MSF on holidays shows regulator’s intent to manage and keep liquidity efficient for the bank.”

Suresh Khatanhar, Deputy MD, IDBI Bank, pointed out, “As fundamentals of the economy remain strong with banks and corporates reporting healthier balance sheets and fiscal consolidation on course, the external balance with strong forex reserves provides a cushion against external shocks. A broad-based easing in core inflation certainly points towards past monetary actions yielding desired results. Domestic economic activity is holding up well as assessed by the RBI and the MPC remains alert and prepared to undertake appropriate policy actions as warranted — this provides a good sense of linear growth across sectors for the remaining part of the financial year.”

Rajeev Yadav, MD and CEO, Fincare Small Finance Bank, noted that, “The RBI is keeping things steady with a 6.5 per cent repo rate, aiming to control inflation and support economic growth. This is good news for small finance banks as it provides them with a stable environment. With a close eye on inflation, expected to be around 5.4 per cent, they can benefit from a predictable and supportive monetary policy, which will help them navigate and grow smoothly.”

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