Kochi: Leading bankers in Kerala on Wednesday hailed the outcome of the Reserve Bank India’s Monetary Policy Committee (MPC) meet, stating that its decisions will keep inflationary expectations anchored while keep economic growth on track.
On Wednesday, the MPC decided to increase policy repo rate by a modest 35 bps while keeping the inflation forecast steady but cutting economic growth to 6.8 per cent.
Most of the bankers feel that the rate action by MPC is in sync with industry expectations while 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 expectation anchored, they added.
Federal Bank Group President & CFO Venkatraman Venkateswaran said against the backdrop of geopolitical tensions, global uncertainty and slowdown in global growth, India 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 the RBI’s main focus,” he added.
South Indian Bank MD & CEO Murali Ramakrishnan opined that 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 Inflation has been persistent and the RBI has, predictably, withdrawn its accommodative stance.
“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,” he said.
ESAF Small Finance Bank MD & CEO K. Paul Thomas said the repo rate has been increased for the fifth time in a row by 35 bps, hence, the current monetary policy stance will help in maintaining adequate liquidity in the system and bring inflation back under control.
“The RBI has put forth two important regulatory changes. Firstly, 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. Secondly, expanding the scope of the Bharat Bill Payment System 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,” he said.
–IANS
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