GDP slowdown on expected lines: bankers

Bankers today said a slowdown in GDP growth to 7.8% in last quarter of FY11 was on expected lines as the Reserve Bank and international agencies like the IMF had already hinted at a dip in growth.

"(It) is not something totally unexpected. It was clear many of RBI's reports and international financial institutions had been hinting that the growth may not be same as last year," Central Bank of India's Chairman and Managing Director, S Sridhar, told reporters here.

Looking at the possible slowdown in growth, banks have already taken the right steps, he said, adding that the RBI has also downsized the growth expectations both in advances and deposits in its annual monetary policy.

With data released today confirming the fears of slowdown in growth, lenders and other agencies will have to take a "more nuanced" response, he said.

Data released today said GDP grew 7.8% in the January-March quarter versus 9.3% for the same period year ago while the total GDP growth for the entire FY 11 was a healthy 8.5%.

Union Bank of India Chairman and Managing Director M V Nair said one should not read too much into the 7.8% number as it is only a couple of notches below the RBI's forecast of 8%.

"A few points here and there should not matter much," he said, conceding that the numbers are less than what he had expected.

Both Sridhar and Nair drew attention to the RBI's stated policy of targeting the rising inflation number even if it results in the growth slowing down in the near term.