Terming it as a forward-looking policy, Karnataka Bank has said that the RBI policy is aimed at stimulating growth and investment scenario.
Mr P. Jayarama Bhat, Managing Director of Karnataka Bank Ltd, told Business Line that at the same time RBI has indicated limits on further reduction in policy rates. “It is a balanced act. It will support growth,” he said.
To a query about if the bank will pass it on to the customers, he said the ALCO (asset-liability committee) of the bank will meet soon and take a decision on this.
On the stance of the banking sector on this, he said it all depends on the portfolio of individual banks. As the central bank has done this repo rate reduction with a view to improving the growth, definitely banking sector should support that.
The RBI’s aim is to increase the growth momentum. Depending on individual liquidity, banks may take a decision.
Non-food credit growth, deposit growth
Mr Bhat said that indicative projections for non-food credit growth of 17 per cent and deposit growth of 16 per cent look to be achievable.
The leeway given in the MSF (marginal standing facility) will improve liquidity and will reduce the cost of borrowings of banks, he added.