India Inc is happy over the RBI’s decision to focus on growth rather than tightening the monetary policy in view of inflationary fears in today’s quarterly policy review.
“It is heartening to note that the RBI has chosen growth over monetary tightening and inflationary fears,” FICCI President Harsh Pati Singhania said in a statement while expressing hope that the policy will continue to ensure credit availability at the right cost.
It is prudent to retain the monetary stimulus provided a few months ago which along with the fiscal stimulus has helped in economic revival of the Indian economy, CII Director General Chandrajit Banerjee said.
The RBI’s stance of not tinkering with the key policy rates - CRR, repo and reverse repo - was welcomed by corporate India too.
“This (keeping key rates intact) is also indicative of the fact that RBI has set its mood to review the ongoing interest rate regime in view of inflationary expectations in its next quarterly review policy,” Assocham President Swati Piramal said.
Assocham further said the RBI’s decision to increase provisioning requirement, which has been hiked from 0.40 per cent to one per cent for standard assets, to commercial real estate sector is a proactive step by RBI in view of large funding to this sector by commercial banks.
Ficci also welcomed the RBI’s move to introduce plain vanilla OTC single-name Credit Default Swaps and expressed hope that the “RBI will have enough checks and balances to ensure that the product is utilised in an appropriate manner.”
The CII applauded the RBI’s decision to introduce a fourth category of NBFCs as ‘infrastructure NBFCs’
Further, relaxation in Branch Authorisation Policy for Domestic Scheduled Commercial Banks in Tier 3 to 6 centres is a welcome move, which will help banks in need based and timely expansion of their branches and also take forward the objective of financial inclusion, CII’s Banerjee said.