Mumbai: The Reserve Bank of India's decision to leave the benchmark repo rate unchanged at 5.25 per cent on Wednesday, while raising its growth forecast and lowering the inflation projection, provides policy stability and supports credit growth amid an uncertain global environment, bankers said.
Bankers also welcomed the central bank's proposed regulatory measures, including a review of the interest rate framework for loans to improve transparency and monetary transmission, and the proposed resumption of on-tap licensing for urban cooperative banks.
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State Bank of India Chairman CS Setty, who also chairs the Indian Banks Association (IBA), said the RBI's decision to keep rates unchanged while revising the growth outlook upwards and inflation forecast downwards reflected a balanced and pragmatic approach that preserves macroeconomic stability.
He said the proposed review of the interest rate framework would enhance transparency in loan pricing, while measures relating to urban cooperative banks and rural cooperatives would strengthen financial inclusion and improve last-mile credit delivery.
On Wednesday, the central bank kept its benchmark policy rate unchanged for a fourth consecutive meeting, opting to wait for greater clarity on whether higher energy costs triggered by the Iran war feed into broader inflationary pressures.
The six-member Monetary Policy Committee, headed by Governor Sanjay Malhotra, unanimously voted to keep the policy repo rate unchanged at 5.25 per cent and retained its "neutral" policy stance.
