Bankers, on Tuesday, said the Reserve Bank of India’s decision to hold key rates, coming after a decisive mandate received by the Narendra Modi government, was on expected lines and the interest rates won’t change even though the central bank’s SLR cut infuses additional liquidity into the system.

“This was very much on expected lines and what is important is the consistency which the RBI has shown in its moves, like the focus on the consumer price inflation number and a clear articulation of the guidance,” Bank of Baroda Chairman and Managing Director S S Mundra told PTI.

When asked if the decisions may lead to rate cuts, Mr. Mundra said most banks carried excess SLR securities and, hence, the move to cut it would not have any impact on the banks’ cost of funds.

Indian Overseas Bank Chairman and Managing Director M. Narendra said his bank was not considering any rate change even though he gets about Rs.1,600 crore released because of the SLR cut and the decision to reduce the export credit refinance (ECR) limit to 32 per cent from 50 per cent.

He said the ECR decision was on expected lines as the RBI had already said it wanted to make it market-linked over time.

Shailendra Bhandari, Managing Director and Chief Executive Officer of private sector lender ING Vysya, called it a “neutral to dovish” policy announcement.

“We see stability and steady policy stance even as the overall approach of the policy is neutral to dovish,” he said.

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