Address capital concerns, say bankers

India Inc was disappointed by the RBI move to retain the Repo rate at 6 per cent.

Bankers have said the Reserve Bank of India’s monetary policy stance was on the expected lines and proposed steps to address capital concerns of banks and calibrated public spending by the government to shore up the economy. However, India Inc was disappointed by the RBI move to retain the Repo rate at 6 per cent.

“The benefits of initiatives like the GST, and drive towards a cashless economy, will take some time to be fully absorbed in the system. In the interim period, the RBI’s policy, argues for calibrated public spending in infrastructure, investment projects and affordable housing to provide support for growth numbers. At a tactical level, the government must address the capital situation at public sector banks to ensure that credit disbursal to the productive sectors continues uninterruptedly,” said Arundhati Bhattacharya, Chairman, SBI.

“The MPC has not viewed the recent growth slowdown as being structural in nature and is expecting it to be transient … “ said Chanda Kochhar, MD and CEO, ICICI Bank. Rana Kapoor, MD & CEO, Yes Bank, said the monetary policy status quo reflects prudence and pragmatism amid global developments including structural adjustments in US and firming up of dollar and oil prices.

Story continues below this ad

Meanwhile, industry chamber Assocham said, “RBI should have taken a bold move and cut the policy interest to boost the growth as the inflation level is still well within control.”

Pankaj Patel, President, FICCI, said, “In context of the current industrial situation, we felt that there was a need for a further cut in the repo rate. While RBI cites inflationary pressures to remain a concern, FICCI feels that we need to give equal consideration to growth prospects.”