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.
Also Read: RBI to resume urban cooperative banks’ licensing after 22-year pause, review rural bank rules
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.Also Read: RBI holds policy rates while raising growth forecast; cuts inflation projections
Indian Overseas Bank Managing Director and CEO Ajay Kumar Srivastava said the status quo on rates and the continuation of the neutral stance reflected the RBI’s confidence in the resilience of the domestic economy despite geopolitical tensions and evolving global trade conditions.
He said stable policy rates would provide predictability in borrowing costs and support credit flow to productive sectors, including MSMEs, while the proposed harmonisation of lending rates across regulated entities would improve transparency.
Indian Bank managing director and CEO Binod Kumar said the upward revision in the GDP growth forecast to 6.7 per cent for FY27 from 6.6 per cent indicated the resilience of the Indian economy.
The RBI projected consumer price inflation at 5 per cent for the current 2026-27 financial year compared to 5.1 per cent forecast in June. It lowered its projection for core inflation, which excludes food and fuel, to 4.3 per cent from 4.7 per cent.
Marginally raising its economic growth forecast for the current financial year to 6.7 per cent from 6.6 per cent projected in June, the central bank said domestic growth remained resilient, supported by robust domestic demand, manufacturing and services activity and strong exports, despite heightened global uncertainty stemming from the West Asia conflict and trade tensions.
Further, Brajesh Kumar, Managing Director and CEO of Canara Bank, said surplus liquidity, supported by FCNR (B) inflows, could aid credit growth and keep bond yields stable.
Suryoday Small Finance Bank Managing Director and CEO R Baskar Babu said policy stability would help lenders better manage funding costs and support lending to retail, microfinance and MSME borrowers.
“Proactive liquidity management and policy measures to enhance transparency and consumer protection bode well for long-term growth in the retail lending sector,” said Sudipta Roy, managing director and CEO of L&T Finance.