Rate hike: Bankers find succour in neutral stance, other

Despite the "preemptive" rate hike of 0.25 per cent, a majority of the banks today welcomed RBI's decision to keep the policy stance in the "neutral" zone and also the non-rate actions.

Only HDFC Bank said that there might be more such rate hikes in store, joining a growing string of analysts who hold this view.

"The decision to keep the stance in neutral mode indicates RBI's willingness to be flexible and accommodative," chairman of the country's largest lender SBI, Rajnish Kumar, said in a statement.

Microlender-turned-universal bank, Bandhan Bank, also concurred. Its managing director and chief executive C S Ghosh said RBI has retained the stance of the policy neutral and has not indicated any withdrawal of accommodation.

"This means, the future course of the policy remains open. It will be driven by the trajectory of inflation," he said.

Axis Bank's outgoing managing director and chief executive Shikha Sharma said the policy is "very balanced", with signals that there will not be an aggression in rate hikes in the future.

Kumar said the bouquet of measures on the development front are "positive" and specifically pointed out to the move on the liquidity front, saying it will lead to a moderation in short-term lending rates.

Other moves like increase in threshold limits for affordable housing, encouraging continued formalisation of the MSME sector, change in SDL (state development loans) valuation norms and the spread of MTM (mark to market) losses over four quarters were also welcomed by the head of SBI.

ICICI Bank's Chanda Kochhar also welcomed the non-rate actions particularly those on liquidity.

Kochhar, who is currently facing a probe by an independent panel for alleged conflict of interest, said the rate hike "reaffirms RBIs credibility as a vigilant central bank especially against the backdrop of heightened global uncertainties".

Yes Bank's managing director and chief executive Rana Kapoor said the hike shows an "alacrity to retain inflation" within the target.

Standard Chartered Bank's country head Zarin Daruwala termed it as a "balanced" policy which acknowledges the inflationary pressures.

"RBI will remain more vigilant on retail price levels in the coming months," state-run Bank of India's managing director and chief executive Dinabandhu Mohapatra said.