Bankers miffed, but economists hail RBI stance

"We were overwhelmed by the current need for growth revival. We were slightly over optimistic, but the Reserve Bank has taken a very balanced view because it analyses data from the macro-level," Indian Overseas Bank Chairman and Managing Director M Narendra told PTI.

He said the RBI will wait and watch for factors like a good monsoon and oil prices coming down further, which can have an impact on inflation, before taking a call on rate cuts in its future policy announcements.

"It is clear that for the RBI, inflation is still the primary concern. They feel that controlling inflation is more important than pushing growth and we can see a rate cut only in the event of a reduction in inflation," Andhra Bank Chairman and Managing Director B A Prabhakar said.

However, economists heaped praise on the RBI for not giving into the widespread calls for cutting rates.

"This is a very objective policy and it was good to note that the RBI has not leaned to market pressures on reduction of policy interest rates," Kotak Bank Chief Economist Indranil Pan said.

Federal Bank Managing Director and Chief Executive Shyam Srinivasan said the RBI has made a tough call by focusing on inflation and signaling that supply side issues should be addressed by the Government.

However, he expected some positive indications from the July policy as by that time RBI will have clearer picture on the domestic growth issues as well as the Eurozone crisis. Moreover, the easing commodity prices should help it in formulating its policy. (more)