RBI Policy: Veteran bankers say CRR on expected lines as RBI sticks to calendar
Neeraj Gambhir, President, Head-Treasury and Markets of Axis Bank, SS Mallikarjuna Rao, MD and CEO of Punjab National Bank and Ashwani Bhatia, MD of State Bank of India (SBI) shared their readings and outlook on the Reserve Bank of India's (RBI) monetary policy.
The Reserve Bank of India (RBI) announced its monetary policy on Friday after a three-day policy meet. The Central Bank held the repo rate at 4 percent and kept the stance 'accommodative', in the first policy after Budget 2021.
Neeraj Gambhir, President, Head-Treasury and Markets of Axis Bank, SS Mallikarjuna Rao, MD and CEO of Punjab National Bank and Ashwani Bhatia, MD of State Bank of India (SBI) shared their readings and outlook going forward.
SBI’s MD said, “RBI won’t change the policy just because the market is expecting it. So it is sticking to its calendar. I don’t see anything wrong in it. I guess the market was expecting that it will be pushed forward by six months or a year. Once RBI gives guidance, it sticks to it.”
“The increase in cash reserve ratio (CRR) is expected. Originally when it was announced, it was applicable only to March now they have given further window for reduction over a period of time. So it is an advantage policy consistency for us. More statutory liquidity ratio (SLR) related announcement and CRR related announcement is in good line so that we can plan accordingly for adhering to the lower levels over a period of time,” said Mallikarjuna Rao.
“Even TLTRO on-tap for covering non-banking financial companies (NBFCs) is a good measure. So it will be an opportunity for lending towards them to tap the market,” Rao added.
“The market is somewhat nervous about how this large borrowing program is going to get absorbed and what kind of support from RBI will be required going forward and whether that support will be forthcoming. That is what is getting reflected in the price,” said Gambhir.
For more, watch the video...
(Edited by : Anshul)
First Published: Feb 5, 2021 12:27 PM IST
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