Bankers upbeat

A.K. PURWAR, CHAIRMAN, STATE BANK OF INDIA: RBI8217;s annual policy as given a fresh thrust to growth and development with its focus on inf...

A.K. PURWAR, CHAIRMAN, STATE BANK OF INDIA: RBI8217;s annual policy as given a fresh thrust to growth and development with its focus on infrastructure, hospitals, education, agriculture, small and medium-sized enterprises and rural development. The measures to encourage priority sector lending and accelerate the flow of credit to micro-finance will give a boost to priority sector lending.

K. CHERIAN VARGHESE, CHAIRMAN, CORPORATION BANK: It is in tandem with expectations as none of the market participants were expecting any major announcement. However, through the policy, the RBI governor has sent an important signal to bankers; do not become complacent!

P.S. SHENOY, CMD, BANK OF BARODA: RBI has promised to support the growth momentum through appropriate liquidity management in the interest of macroeconomic stability. Though there has been anticipation that interest rates in India have bottomed out given the recent trends in international interest rates, the RBI has left unchanged the policy interest rates.

AMIT TANDON, MANAGING DIRECTOR, FITCH RATINGS INDIA: To support infrastructure lending by banks, RBI will now permit banks to issue long-term bonds, which are not subordinate in nature, up to the extent of their residual exposure. I see this as imparting greater depth to the debt markets; increased infrastructure lending by banks would also fill the void created by the weakening development financial institutions.

NAVAL BIR KUMAR, MD, STANDARD CHARTERED AMC: The RBI may pursue further structural changes upon government formation with greater clarity on fiscal measures and direction of administered interest rate levels. We expect interest rates to remain rangebound over the next few months with the level of liquidity remaining comfortable. Given that volatility in interest rates is expected to remain predictable driven by economic factors, actively managed debt funds like dynamic bond funds and medium term funds should outperform in the debt fund category.

BHASKAR GHOSE, MD, INDUSIND BANK: The RBI8217;s inflation estimate of around 5 pc for 2004-05 as a whole may be somewhat optimistic. With increasing oil and commodity prices, along with a significant upturn in projected GDP growth, there is adequate upward pressure on inflation. Thus, average inflation for the year is more likely to be in the range of 5.5-6.0 pc.

DIPAK GUPTA, ED, KOTAK MAHINDRA BANK: RBI8217;s move to extend further flexibility to banks on their loan policies is a step in the right direction. It has withdrawn the limit on banks8217; unsecured exposures and allowed banks8217; boards to fix their own policy on unsecured exposures. However, banks would be required to make an additional provision.