K V Kamath, CEO, ICICI Bank The statement signals a stable policy stance aimed at supporting the overall economic growth and improving the efficiency of the banking system. |
The policy reiterates RBI's specific focus on improving credit delivery and pricing across sectors, with a focus on facilitating the growth of infrastructure, small & medium enterprises and agriculture. |
The RBI has signaled a positive outlook on the macroeconomic front, signifying India's continued presence among the top performers globally in terms of GDP growth for FY05. |
R Ravimohan, MD & CEO, Crisil The RBI has maintained its strategy on key instruments of liquidity management. It has allowed lending rates to be more finely differentiated on the basis of the borrowers' perceived risks. |
This is an essential reform of bank lending practices and all steps to firmly entrench it must be taken. Acceleration in commercial credit last year implies that, given the RBI's expectations of industrial growth, we would expect to see tightening liquidity conditions. |
Therefore market interest rates are likely to increase as banks move out of gilts. |
A K Purwar, Chairman, State Bank of India RBI's Monetary and Credit Policy for the year 2004-05 Comments of SBI Chairman Shri A. K. Purwar In its Annual Policy Statement, RBI has focused on continuity along with growth and development. |
The thrust on agriculture, SMEs, infrastructure, hospitals, education and agro-based industries will help fuel growth. The RBI's policy is set against the backdrop of optimistic outlook for GDP, comfortable external sector, and manageable inflation. |
Y M Deosthalee, Director & CFO, Larsen & Toubro The RBI governor has taken a conservative approach. The policy reiterates its focus on ensuring the growth momentum and maintaining price stability. |
All the banks migrating to the RTGS system by June 2004 should result in time and cost effectiveness for corporates. The policy seeks to draw the road map for the banking system to migrate to the Basel II norms. |
A better pricing alignment and credit risk assessment and development of a mechanism for debt restructuring will help clean up corporate balance sheets and make them more credit worthy and cost effective. |
Christopher Low, CEO, StanChart The governor has delivered a pragmatic policy in line with the need of the times. International investors should be happy to see that the RBI is in complete control of the financial sector reform and monetary policy measures and the volatility of the last few days is a short term reaction. |
This should go a long way in calming foreign investors who are watching developments in India closely. Credit is expected to grow. This is in line with our view that the industry has restructured and is on the cusp of a very strong revival. |
Sanjay Nayar, CEO, India & Area Head, Citibank The policy provides continuity to the previous policies and is backed by a consultative approach through various participative committees. |
It correctly continues with 'status quo' on the current interest rate environment but at the same time cautions participants of the inflation and global macro-economic scenarios. |
RBI has noted that given the current interest rate scenario and high exposure of the banking system to the government securities, there is an inherent interest rate risk in the banking system and has rightly advised banks to take steps to build-up investment fluctuation reserves. |
M Venugopalan, CMD, Bank of India The policy is along anticipated lines and propounds changes which were expected and as per the wish list of bankers and market players. |
With economy performing well and inflation relatively under check, there was no impulse to change any of the rates of interest or liquidity maintenance ratios. |
The Governor, however has rightly warned the banks/market players of risks lurking in the background vis-à-vis interest rates. The policy has welcome features for smoothening credit flow to agriculture and infrastructure in particular. |
H N Sinor, Chief Executive, Indian Banks' Association It is broadly a continuation of the earlier practice. It provides the rationale for various measures taken and the road-map for further strengthening the financial system. |
While leaving key monetary measures like bank rate, repo rate untouched, the policy statement has taken new initiatives like issuance of long-term bonds by banks for infrastructure financing, capital charge for market risks, removal of cap on unsecured exposures, full risk-weight for exposure to public financial institutions, diversified ownership for C IB etc.
OVERALL 7.5/10 |