Industry welcomes RBI's balanced approach

MUMBAI, INDIA: The decision of the Reserve Bank of India (RBI) to leave key rates unchanged at its first-quarter policy review is seen as a balanced one by the industry.

“Even though the RBI did not change policy rates in its first quarter review, it clearly stated that ensuring a flow of credit to the private sector at viable rates is one of its key objectives. CII understands that the RBI faces some difficult challenges in the current macroeconomic situation,” said Venu Srinivasan, President, CII.

He added that the news on growth has been positive and growth projections have been moving up.

Observing that the RBI’s expectation of higher growth in the economy this fiscal is good news, V. Balakrishnan, CFO, Infosys Technologies, said RBI has a greater challenge of controlling the inflation risk without impacting growth.

“As expected the credit policy has maintained the status quo. There is enough liquidity in the system and there is no case for a rate cut today. There is a case for bringing the reverse repo rate to zero so that banks focus more on lending to corporates,” he said in a statement.

Puneet Datta, senior manager-marketing, Business Imaging Solutions, Canon, termed the RBI approach as a balanced one.

“It is the right thing to do in today's scenario when the economy has come past the U Part of the curve and it would be right not to disturb anything dramatically. Though various indicators point to an economic upswing, the current phase of correction is required for the economic phase that is on the anvil," he said.

“As generally expected, there is no reduction in Repo rates - although now it’s the responsibility of banks to reduce the interest rates truly,” said Umashankar.S, vice president, marketing – Four Soft.

He said this would pump in surplus working capital for the adventurous players in the industry to go in for IT systems upgrades or revamps.

“For the customers of our industry ( IT products and Services), from a timing perspective, this is the best time to revisit their technology investments in terms of upgrades," he added.