 "RBI meets select bankers ahead of policy")
Top Reserve Bank of India (RBI) officials met a select set of bankers on Tuesday ahead of the first bi-monthly monetary policy to be announced on April 1. The meeting focused on issues pertaining to non-performing assets (NPAs), restructuring, credit offtake, loan pricing and capital of banks.
A banker who attended the meeting said it was an informal meeting.
On Wednesday, RBI will meet another group of bankers in a similar fashion.
The general expectation among experts is that key policy rates will be kept unchanged in the first bi-monthly monetary policy for FY15, in view of softening inflation.
RBI's focus is now more on consumer price index (CPI)-linked inflation as recommended in the Urjit Patel committee report. CPI inflation eased more than expected to a 25-month low in February. The CPI inflation rose 8.1 per cent from a year earlier to 8.79 percent in January. Wholesale price index (WPI)-based inflation, on the other hand, eased to a nine-month low in February to 4.68 per cent.
Speaking about the disadvantages of high inflation last week, RBI governor Raghuram Rajan said high inflation is bad. “In the short-run, there may be a cost to bring down inflation in terms of growth, but probably in the long-run, bringing down inflation is a good thing.”
A banker who attended the meeting said it was an informal meeting.
On Wednesday, RBI will meet another group of bankers in a similar fashion.
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T M Bhasin, chairman and managing director of Indian Bank, who attended the Tuesday meeting, said it was a general discussion between bankers and RBI's top management on a variety of issues related to the banking industry. RBI holds these pre-policy discussions with public, private and foreign banks ahead of every monetary policy announcement.
The general expectation among experts is that key policy rates will be kept unchanged in the first bi-monthly monetary policy for FY15, in view of softening inflation.
RBI's focus is now more on consumer price index (CPI)-linked inflation as recommended in the Urjit Patel committee report. CPI inflation eased more than expected to a 25-month low in February. The CPI inflation rose 8.1 per cent from a year earlier to 8.79 percent in January. Wholesale price index (WPI)-based inflation, on the other hand, eased to a nine-month low in February to 4.68 per cent.
Speaking about the disadvantages of high inflation last week, RBI governor Raghuram Rajan said high inflation is bad. “In the short-run, there may be a cost to bring down inflation in terms of growth, but probably in the long-run, bringing down inflation is a good thing.”