The Reserve Bank of India’s status quo on the repo rate is on expected lines in view of the inflation pressure building up in the economy, say top bankers. They welcomed the time-relaxation granted to GST-registered MSME borrowers on repayment of loans and removal of credit caps on MSMEs (services) under priority sector.

Rajnish Kumar, Chairman, State Bank of India: The RBI monetary policy announcement is pragmatic and balanced. The RBI inflation outlook suggests moderation in the second half of FY2019, which will have a positive impact on the bond market. Apart from the status quo in rates that was widely anticipated, the forbearance allowed to MSME borrowers, broadening the definition of priority sector lending and simplification of repo directions, among others, are all positive steps towards a stable macro environment.

Chanda Kochhar, MD and CEO, ICICI Bank: It is heartening to note that the apex bank has acknowledged a positive outlook of growth due to a combination of factors such as investment, export recovery, asset resolution for large borrowers and increase in credit offtake. The removal of the priority sector cap for MSME loans will help to channel additional resources to this sector. The flexibility given to non-residents to hedge currency and interest rates is a positive move that will deepen the Indian markets.

Usha Ananthasubramanian, Chairman, Indian Banks’ Association: The policy has been on expected lines. Considering the thrust given to inflation management and the recent trajectory of inflation, the present stance of the RBI is fully justified. Policy relaxation given to the MSME sector for the overdue payment and the removal of credit caps on MSME (services) under priority sector augur well for both MSMEs and banks.

Dinabandhu Mohapatra, MD & CEO, Bank of India: The policy rate has taken ground realities into consideration. The upward revision to CPI inflation forecast for Q4 FY18 shows the concern by the MPC on the inflation outlook. The forbearance given to MSMEs below an exposure level of ?25 crore is a welcome development.