The steady momentum is being witnessed in the investment cycle which will help the economy grow faster
FinTech BizNews Service
Mumbai, February 9, 2024: Shaktikanta Das, Governor, Reserve Bank of India, announced a number of decisions after the MPC meet on Thursday. The BFSI experts have shared interesting insights on these measures. Madan Sabnavis, Chief Economist, Bank of Baroda: “The credit policy was more or less on expected lines. The Governor has maintained that there has still not been complete transmission of the 250 bps hike in repo rate which makes the stance remain unchanged at ‘withdrawal of accommodation’. The RBI has affirmed its confidence in the growth story of India and projected GDP to increase by 7% next year. With growth on target, the concentration will be on bringing down inflation to the target of 4%. Based on the quarterly projections of inflation for next year, we believe that a rate cut is possible only in Q2 FY25 when the forecast of inflation is 4%. However, it is expected to increase in Q3 and Q4 to above 4.5% and hence there will be a nuanced approach by the RBI. We do get a sense that the RBI will have to be convinced that inflation is stable and in the downward path before it embarks on either changing stance or the repo rate.”
Ajit Velonie, Senior Director, CRISIL Ratings: “The RBI’s directive to lenders asking them to disclose the all-inclusive annual percentage rate (including fees and other charges) in their key fact statement (KFS) for all retail and MSME loans is welcome because it now brings consistency to norms across asset classes. This disclosure, which was already applicable to digital loans and microfinance loans of non-banks, will improve transparency and allow borrowers to make informed decisions when seeking a loan. The mandate will be specifically relevant for shorter-tenure loans which have relatively higher upfront processing fees but competitive interest rates.”
Naveen KR, smallcase Manager, Senior Director, Windmill Capital: “The RBI has adopted a steady and stable approach to guide the economy ahead. The rate status quo was in line with expectations. Though inflation has moderated, the situation is not completely diffused as geopolitical risks could shoot inflation further up. GDP growth projections are buoyant and as mentioned earlier RBI is taking a cautious approach both in terms of execution and forecasts. One of the most positive things that came out today in the speech was the steady momentum being witnessed in the investment cycle which will help the economy grow faster.”
