Mumbai, April 8 Bankers described the Reserve Bank's decision to maintain interest rates in its policy review on Wednesday as a prudent and well-calculated measure.
Specific measures for individual sectors, such as the removal of the Investment Fluctuation Reserve requirement and easing of CRAR (capital and risk-adjusted ratio) computation, were also welcomed by bankers.
"The RBI's decision to maintain a status quo stance in the face of ongoing global uncertainties reflects a prudent and well-calculated approach that aligns with market expectations," said CS Setty, who chairs the largest lender SBI and also the industry grouping IBA, in a statement.
Setty said that the regulatory measures would help strengthen banks' capital positions and support sustained credit growth.
Ajay Kumar Srivastava, Managing Director and Chief Executive of Indian Overseas Bank, said that the status quo reflects a "safety first" approach, wherein the central bank is prioritizing macroeconomic stability.
"A cautious stance is warranted in light of evolving global uncertainties, particularly geopolitical tensions in West Asia and volatility in crude oil prices," he said.
The removal of due diligence requirements for onboarding onto the TReDS platform is a progressive step that will significantly enhance liquidity access and working capital efficiency for small businesses, he said.
Sanjay Agrawal, Founder, Managing Director and Chief Executive of AU Small Finance, said that the decision to maintain rates is pragmatic, signaling that the economy has resilience.
"The market has factored in the RBI's caution regarding upside risks to inflation and downside risks to growth under the baseline scenario, due to rising input costs following supply chain disruptions related to crude oil, gas and other commodities," he said.
P D Singh, Chief Executive for the country and South Asia at Standard Chartered Bank, said that the potential risks from the West Asia crisis resulted in the status quo in rates.
"The measures to enhance capital metrics through review of incremental provisions on non-performing assets and the investment fluctuation reserve, improving ease of trade for MSMEs and development of the term money market continue the structural business-friendly measures announced by the RBI," Singh said.
Among the non-banks, George Alexander Muthoot, Managing Director of Muthoot Finance, said that the policy reinforces confidence in India's economic fundamentals, and added that he expects credit demand to remain resilient in the near term as growth momentum sustains.