Rate reactions

A.K. Purwar, Chairman, SBI: The policy is growth-oriented. Global oil prices and inflation have emerged as key concerns and against this bac...

A.K. Purwar, Chairman, SBI: The policy is growth-oriented. Global oil prices and inflation have emerged as key concerns and against this background, RBI has made a more realistic assessment of the Indian economy, striking a balance between growth and inflation. RBI has signalled that it needs to be ahead of the curve and reign in inflation, while at the same time it has tried to sensitivise banks to the risks ahead.

M. Venugopalan, CMD, Bank of India: The monetary policy stance seeks to address aspects such as provision of adequate liquidity, while keeping a close watch on the movements in the price level to maintain the momentum of growth. The increase in repo rate by 25 basis points and reducing the spread between the repo rate and the reverse repo rate by equivalent basis points, is designed to absorb excess liquidity from the system with a view to managing inflationary pressures.

P.S. Shenoy, Chairman 038; MD, Bank of Baroda: RBI8217;s policy has appropriately touched lending to the priority sector. Some of the critical recommendations of the Vyas Committee on Agricultural Credit relating to restricted provisions of service area approach, advances to dealers in agricultural machinery and inputs, bank lending to small and marginal farmers, etc, have been implemented.

R. Ravimohan, MD 038; CEO, Crisil: Given healthy deposit growth and existing liquidity in the banking system, and the high-levels of inter-bank competition, banks are not likely to increase lending rates as yet. Banks will probably feel the impact of lower lending margins in the medium term.

Rajesh Mokashi, ED, CARE: By leaving the bank rate unchanged, the economy is expected to continue to be characterised by low interest rate environment which would support the momentum of industrial growth. However, the interest rate environment would continue to be sensitive to international oil prices and the resultant inflationary pressures.

Jyotivardhan Jaipuria, Head of Research, DSP Merrill Lynch: RBI continues to balance their support for economic growth while moderating inflationary expectations. However, global inflation in the shape of higher oil and commodity prices is a greater concern for equity markets.

M. Anandan, MD, Cholamandalam Invstment: The credit policy this year has to be appreciated for including non-banking entities not accepting deposits under regulation scanner. Also banks are now allowed to enter the used vehicle refinancing section. It is only going to help in the growth of the sector.

Story continues below this ad

Milind Barve, MD, HDFC Mutual Fund: The mid-term policy remains optimistic on growth but at the same time has sounded cautious with respect to the percieved threats to the economy. The earlier projections for inflation of around 5 per cent was totally unachievable and this has been revised upwards to around 6.5 per cent.