Industry leaders View on RBI’s Monetary Policy

Atul Kumar Goel, MD and CEO of Punjab National Bank (PNB) 
“RBI has kept the rates and stance unchanged in line with the market expectations in view of easing retail inflation and anticipation of a further decline. Maintaining the growth projection of GDP for FY’24 at 6.5% reflects that RBI remains sanguine about the economic growth projections. Reduction of the Inflation projection for FY’24 also indicates optimism.
 
RBI’s announcement on allowing Scheduled Commercial Banks to set their own borrowing limits has given much required flexibility to Banks. RBI has decided to come out with a regulatory framework for permitting First Loss Default Guarantee (FLDG) arrangements in Digital Lending which will promote more transparency and discipline in digital lending environment. Similarly, proposing the framework for widening of scope of resolution of stressed assets indicate that RBI is right on the track of instilling harmonization across Regulated Entities.
 
RBI continues to adopt a liberal approach towards BBPS by streamlining its processes to bring more competence and boost involvement. Further, action on internationalizing RuPay Debit Cards and Pre paid Cards points to RBI’s earnest approach on broad-basing the scope of the cards and increasing comfort for Indians travelling abroad.

Overall it seems to be an action oriented policy with evenly balanced approach. However, in view of the dynamic world economic scenario, we anticipate that RBI will remain watchful.”

Madan Sabnavis, Chief Economist, Bank of Baroda
 
“The credit policy was more or less on expected lines. The RBI has indicated two things. The first is that while GDP growth will be 6.5% for the year, there will be a tendency for the growth rate to keep declining progressively across the quarters. The other is that inflation will be 5.1%, though will be lower at 4.6% in Q1. Subsequently it will be increasing progressively in the next two quarters to 5.4% in Q3. This indicates that it looks unlikely that there will be a rate cut until Q4. The RBI has also been clear that the decision taken today is for this quarter only and future action will be data driven. Hence this should not be taken as being close to change in stance. We expect bond yields to be stable especially at the longer end.”

 
 
Pranay Jhaveri, MD - India and South Asia, Euronet
 
“Streamlining Bharat Bill Payment System will help integrate backend systems efficiently for a seamless experience, which could also bring new players to the table and improve the ad-hoc payment system, It will be an advantage to bolster fraud monitoring and risk mitigation systems to ensure smooth online transactions.”
 
 

Rajesh Sharma, MD, Capri Global Capital Ltd
“Today’s announcements by RBI to keep the repo rate unchanged after a total 250 bps increment since May 2022 is an encouraging sign to keep the positive sentiment of borrowers and would give a big boost to demand for credit appetite. It will help to stabilize the interest rate cycle. There will be a collective sigh of relief from homeowners since they have been feeling the strain of increased interest rates and longer loan terms. The pause in the rate cycle will also aid relief for MSME borrowers who are yet to recover from the pandemic stress and higher cost of borrowing. We believe RBI is evaluating trends in inflation and the movement of high-frequency indicators and global developments like a hawk to exercise a measured approach during this period in order to pave the way for sustainable economic growth and stability in the long run.”