POINTS to ponder
Mumbai, March 25: The Reserve Bank of India today met a select group of top executives from public sector and foreign banks ahead of the bi-monthly monetary policy announcement next week.
The central bank is set to announce its monetary policy on April 1.
Ahead of the announcement, it usually has discussions with the heads of all public, private and foreign banks. While only a few bankers are understood to have attended today’s meeting, a spokesperson for the RBI denied that it was part of its pre-policy discussions.
Bankers who attended the meeting said issues such as non-performing assets (NPAs), capital requirements for the sector and credit growth prospects were discussed. “It was only a general meeting where broad issues such as NPAs, credit offtake and capital requirements were discussed,” said a banker who attended the meeting.
Arun Tiwari, chairman and managing director of Union Bank, told reporters after the meeting that issues such as restructuring of bad loans were discussed.
The RBI is largely expected to hold rates steady in the monetary policy. As inflation measured in both retail and wholesale terms have shown a moderation, it is felt that the central bank may leave the repo rate unchanged and present a dovish outlook.
The chief executives of Canara Bank, Indian Bank and Uco Bank also attended the meeting.
Inflation, as measured by the wholesale price index, stood at 4.68 per cent in February, slipping below 5 per cent for the first time in nine months.
Similarly, retail inflation came down to 8.10 per cent in February from 8.79 per cent in the preceding month. This comes at a time the country’s industrial output and economic growth have been disappointing. India’s GDP (gross domestic product) growth is estimated at 4.9 per cent in the current financial year.
Raghuram Rajan, who took charge as the RBI governor in September last year, has in the past foxed analysts with his monetary policy decisions. For instance, in January when the Street had expected status quo in policy rates, Rajan raised the repo rate by 25 basis points to 8 per cent.