MPC decision pragmatic, candid says SBI Chairman Setty

The monetary policy announcements made on Friday are pragmatic, candid and crossed important milestones in regulatory and development policy space, said C.S. Setty, Chairman, State Bank of India (SBI) while commenting on RBI Monetary Policy announcement. 

“The cut in CRR by 50 bps, raising the FCNR (B) deposit rates, development of the Secured Overnight Rupee Rate (SORR) benchmark and revision in limit of collateralised agriculture loans are all positive for banks. The decision to form a committee to investigate the issue of ethical AI in financial services and use of technology to detect mule accounts is timely,” he said.

M. V. Rao, Chairman, Indian Banks’ Association (IBA) & Managing Director & CEO, Central Bank of India said,” A fifty-basis point cut in Cash Reserve Ratio (CRR) from 4.5% to 4% in two phases is a welcome measure announced by the RBI. 

“It is expected to infuse ₹1.16 lakh crore into the system and banks will have additional resources for lending to the productive sectors. This will also result in lower cost of funds for the banks. Though RBI has not adopted direct measure of reducing repo rate, infusion of liquidity through CRR cut would help to keep the interest rates benign,” he said.

“Recent lower Q2 GDP numbers and high retail inflation in October, 2024 have made the central bank to revise its forecasts both for GDP and inflation. There is a reduction in RBI’s projection on GDP for FY25 to 6.6% indicating slowdown in economic growth,” he added.