Bankers say RBI's status quo on expected lines, LCR review to help
The countrys top bankers on Friday said the Reserve Bank of Indias RBIs seventh consecutive status quo on key rates was along expected lines, and added that the review of the Liquidity Coverage Ratio LCR will be of help.Industry lobby group Indian Banks Associations Chairman M V Rao, who is also the Managing Director and Chief Executive of the state-run Central Bank of India, said the stance is along expected lines.
- Country:
- India
The country's top bankers on Friday said the Reserve Bank of India's (RBI's) seventh consecutive status quo on key rates was along expected lines, and added that the review of the Liquidity Coverage Ratio (LCR) will be of help.
Industry lobby group Indian Banks' Association's Chairman M V Rao, who is also the Managing Director and Chief Executive of the state-run Central Bank of India, said the stance is along expected lines. Largest lender SBI Chairman Dinesh Khara said the status quo should be seen as an affirmation of ''goldilocks'' for India with high growth and low inflation in FY25 and FY26.
V P Nandakumar of non-bank lender Manappuram Finance said he expects the RBI to cut the interest rates or change the stance only when headline inflation returns to the median target of 4 per cent.
''The review of the LCR (Liquidity Coverage Ratio) framework with the advent of 24/7 payment systems could act as a positive enabler to address frictional liquidity mismatches,'' Khara said, commenting on the announcement by RBI Governor Shaktikanta Das earlier in the day. Das had said recent events outside the country have indicated that depositors withdraw or transfer their deposits using digital channels in the event of any stress quickly, and announced the review for ensuring that banks do not suffer during events of ''acute stress''.
Standard Chartered Bank's Chief Executive for India and South Asia Zarin Daruwala said the LCR review will better capture liquidity risks arising from a wider adoption of digital transaction channels and strengthen the banking system.
She said the RBI's resolute focus on achieving the last mile on disinflation is a welcome step which will ensure macroeconomic stability.
AU Small Finance Bank's Sanjay Agarwal welcomed allowing small finance banks to utilise rupee interest derivative products for hedging interest rate risks saying it will impart greater flexibility for our hedging operations and help boost the balance sheet resilience.
The move to allow trading of sovereign green bonds in Gujarat's IFSC (International Financial Services Centre) was also welcomed by bankers, with Khara saying it will help broaden the markets, and Rao observing that it will aid improve flow of resources into the product.
Foreign lender Citi India's Chief Executive Ashu Khullar said the RBI's action underscores that inflation management continues to be the top priority.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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