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Leading bankers in Kerala have hailed the outcome of the Monetary Policy Committee (MPC) saying the decisions will keep inflationary expectations anchored while keeping economic growth on track.
Most of the bankers feel that the rate action by MPC is in sync with industry expectations while a downward revision of GDP growth makes it more realistic.
The continued vigil against the price pressures in the economy, which are albeit easing of late, would help keep inflationary expectations anchored, they added.
Manappuram Finance Ltd
VP Nandakumar, MD & CEO, Manappuram Finance Ltd said, “In my view, by going for a moderate hike to take the policy repo rate to 6.25 per cent, the MPC has taken one more step closer to arriving at a ‘neutral rate’ though it is difficult to hazard a guess about the figure at this point in time. Also, inflationary pressures remain key to how the macro situation will pan out in the near term while keeping growth on the projected track.”
He added, “On the balance, the policy is rightfully optimistic about the resilience of the domestic economy without throwing caution against inflation and the spillover effect of continuing shocks to global growth to the winds.”
Federal Bank
Venkatraman Venkateswaran, Group President & CFO, Federal Bank said, “Against the backdrop of geopolitical tensions, global uncertainty and slowdown in global growth, India’s growth story is a stand-out. Inflation continues to be sticky and further calibrated actions are likely by the central bank. Reigning in inflation and bringing it below the top end of the band and then subsequently further down is RBI’s main focus.”
ESAF Small Finance Bank
K Paul Thomas, MD and CEO, ESAF Small Finance Bank said, “The RBI has put forth two important regulatory changes. First, the enhancement to UPI — processing mandates with a single block and multiple debits can increase customer trust and merchant business as they are assured of timely payments after the actual delivery of goods and services.”
Thomad added, “Second, expanding the scope of the Bharat Bill Payment System (BBPS) to include all payments and collections is another interesting initiative taken by the RBI as it has been decided to expand the scope of BBPS to include all categories of payments and collections, both recurring and non-recurring.”
South Indian Bank
Murali Ramakrishnan, MD & CEO, South Indian Bank said, “Interest rates are bound to rise and GDP growth rates will be lower. In such a scenario, a 35 bps hike in the policy repo rate seems to be the best bet to manage inflation without denting growth rates severely. The MPC’s initiatives on making UPI more well-rounded and complete will further strengthen India’s world-class digital payments ecosystem.”
Ramakrishnan added, “After a period of persistent efforts, we are finally starting to see some headway in reining inflation. A buoyant festive season has been succeeded by a good start to the Rabi sowing period, which augurs well for the Indian economy. Inflation has been persistent and the RBI has, predictably, withdrawn its accommodative stance.”
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