A clear commitment to liquidity infusion through the G-Sec Acquisition Programme (G-SAP) and other growth-enhancing measures announced by the RBI on Wednesday led bankers to give a thumbs-up to the first policy review of the new fiscal.
"The RBI policy statement is a clear commitment to assuage uncertainties in the market through guaranteed, continued liquidity support and explicit guidance to navigate through the current COVID surge, the duration of which is uncertain," SBI's Chairman Dinesh Khara said.
Welcoming other measures such as co-lending with non-banks being classified as priority sector lending, Khara termed the policy statement as one that leaves a "clear imprint on growth".
Industry lobby Indian Banks Association's Chairman Raj Kiran Rai, who also heads the state state-run Union Bank of India, said the liquidity management guidance through the Rs 1 lakh crore bond buys under the G-SAP is an important aspect for banks.
"Considering the huge government borrowing programme, market was expecting a forward guidance from RBI on this area. Policy has given sufficient comfort," he said in a statement.
He said other measures like extension of the targeted long term repo operations (TLTRO) scheme, and additional funding to all-India financial institutions will also be helpful to banks.
Largest private sector lender HDFC Bank's chief economist Abheek Barua said the focus of the policy was clearly on yield management and G-SAP will stabilise and support long term yields.
He said the policy was "more dovish than expected", with the central bank recognising the risks associated with the rising infection cases in the county and continuing its support for growth.
Punjab National Bank's head S S Mallikariuna Rao said the policy is on expected lines with specific measures that will aid faster economic recovery.
"Policy announcement represents a balanced approach to make economic revival deep rooted, ensure orderly development of financial market and keep price movement at manageable levels," Bank of India's managing director and chief executive A K Das said.
Among the foreign banks, Standard Chartered Bank's cluster CEO for India, South Asia Markets, Zarin Daruwala, said this is a balanced policy statement supporting growth while keeping an eye on inflation.
Tata Capital's managing director and chief executive Rajiv Sabharwal said the on-lending facility by NBFCs to agriculture, MSME and housing, and classifying those loans as Priority Sector Lending (PSL), will help in the efficient channelising of credit to productive sectors.
L&T Finance Holdings' MD and CEO Dinanath Dubhashi said the PSL tag will help NBFCs with growth aspirations to sail through smoothly.
Payments banks, which have been allowed to retain deposits of up to Rs 2 lakh from the Rs 1 lakh earlier, also welcomed the policy announcements.
"The move to increase the limit is a positive step from the regulator. We are pleased that the concerns of payments bank players are understood and acted upon, though a limit of Rs 5 lakh would have been preferred," head of Fino Payments Bank, Rishi Gupta, said in a statement.
The increase in the current limit on the outstanding balance in full-KYC (know your customer) prepaid payment instruments (PPIs) from Rs 1 lakh to Rs 2 lakh will incentivise migration to full-KYC PPIs and aid financial inclusion, Paytm Payments Bank's head Satish Gupta said.
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