Bankers welcome surprise pause in hikes, feel RBI now focusing on growth

Mumbai, Apr 6 (PTI) Bankers welcomed the status quo in rates from RBI on Thursday, calling it as an attempt to support growth.

The RBI move on the regulatory front announced along with the first policy review of FY2023-24 also found support from the banker community.

Industry lobby Indian Banks Association chairman A K Goel, who is also the chief executive of Punjab National Bank, said it is a welcome pause which could surprise the market.

“Focus of RBI in this policy is to support growth as it wants to evaluate the effects of the previous rate actions to fully get transmitted into the economy,” he said.

SBI chairman Dinesh Khara termed it a “pleasant surprise” given the market talks of one more final rate hike.

“With uncertainty looming large, this decision was perfectly timed. Simultaneously, the bouquet of regulatory initiatives like linking UPI to credit and developing the onshore market will spur innovations in product offerings,” Khara said.

Zarn Daruwala of foreign lender Standard Chartered Bank said the RBI’s pause is a pragmatic decision in the backdrop of recent global events.

“This wait-and-watch approach will allow the economy sufficient time to absorb the impact of previous rate hikes while leaving adequate headroom to address future inflationary pressures,” she said.

Among the non-banks, Shriram Housing Finance’s Ravi Subramanian said the unchanged repo rate will make it easier for home buyers to make a purchase decision.

Tata Capital’s Rajiv Sabharwal said the move to pause will accelerate the growth momentum in the economy and also allow firms to effectively stabilise their supply chains and operations.