RBI status quo on rates on expected lines, anchored in uncertainties

Mumbai: The decision to hold rates was along expected lines, and anchored in the prevailing uncertainties, bankers said in reaction to the status quo by the RBI's rate-setting panel on Wednesday.

"The MPC decision to hold rates was mostly on expected lines anchored within the uncertainties posed by the lagged response of policy, trade and bottoming of inflation in some advanced economies," SBI and IBA chairman, C S Setty said.

State-run Indian Overseas Bank's managing director and chief executive Ajay Kumar Srivastava hailed the policy for adopting a well-calibrated approach to control inflation and support growth.

"At Indian Overseas Bank, we see this policy stance as growth and stability oriented, and we are committed to supporting the credit needs of individuals and businesses alike," he said.

CSB Bank's CEO and MD Pralay Mondal said he expects the transmission of past rate cuts will be complete in the next couple of quarters and the global uncertainties will also abate.

"Depending on the incoming data, RBI will be better placed to take a decision in the next policy," he said.

Capital Small Finance Bank's MD and CEO, Sarvjit Singh Samra, said the policy signals confidence in the growth trajectory with GDP growth retained at 6.5 per cent despite global headwinds, including recent US tariff actions.

"With adequate liquidity in the system and rates now more conducive, we anticipate stronger credit demand, particularly in MSMEs, affordable housing, and rural lending," he said.

Setty also welcomed the RBI's revised expectations on inflation, which is likely to remain under check at 3.1 per cent as against 3.7 per cent earlier.

This means the growth impulse is expected to be intact despite the concerns of external demand and supply shocks, he said.

Setty welcomed the regulatory and development policy moves, including the proposed guidelines on standardisation of documentation for settlement of claims in case of deceased customers.

Among the non-bank lenders, Shriram Finance's Umesh Revankar said the RBI has adopted a balanced approach, prioritising both inflation control and growth.

"RBI's caution on external risks, particularly global uncertainties and geopolitical developments, could impact growth momentum. However, the policy outcome aligns well with the current economic context and provides a stable business environment," he said.

Among the foreign banks, Citi India's K Balasubramanian said the decision not to effect another rate cut after three successive reductions is prudent - reflecting a balanced approach amid global uncertainties.