Live: RBI Governor Shaktikanta Das Announces MPC Decision | NDTV Profit
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00:00:00 But let's not forget that apart from the rate cut, which I don't think anybody is expecting.
00:00:05 Change of stance?
00:00:06 Change of stance, maybe a withdrawal from restrictive to more of a neutral stance is
00:00:12 what the street is slightly divided on.
00:00:15 But yeah, the bigger story is going to be liquidity.
00:00:17 Let's not forget we had a very critical budget in terms of the macros of the country.
00:00:22 So keeping in mind the path of fiscal consolidation, the fact that market borrowing is lower, US
00:00:28 Fed is not going to move on this rate cut, on their rate cut anytime soon.
00:00:31 And the fact that liquidity will also ease in the system because of our inclusion in
00:00:36 the JPM index.
00:00:37 A couple of factors will play out.
00:00:39 But I think if we were to put our bets on this, Neeraj, no rate cut, no change in stance,
00:00:43 literally just...
00:00:44 No change in stance?
00:00:45 I don't think there could be much coming in, even though I know the house is divided and
00:00:48 that is a little bit of an expectation out there.
00:00:50 But unlikely, right?
00:00:51 I just can't see why we need a change in stance at this stage.
00:00:54 We've seen earnings.
00:00:55 I understand there is a little bit of pressure, but you've anyway got the RBI controlling.
00:01:01 But you change the stance so that you set the stage for being able to take an action
00:01:05 as and when you want to.
00:01:06 That's when you know Neeraj is an equity man, right?
00:01:07 He's literally hoping that there's a change in tone because a change in tone will fuel
00:01:11 the market rally.
00:01:12 Take a look.
00:01:13 Let's quickly take a look at what Bank Nifty is doing, what some of your PSU banks are
00:01:17 doing.
00:01:18 I wouldn't imagine too much activity on any of those parameters.
00:01:21 Oh, and Bank Nifty is not doing too badly.
00:01:24 Maybe they think like Neeraj this morning.
00:01:25 No, just how they started.
00:01:26 Just how it started.
00:01:27 But yeah, you know, bond yields have moved to a different range post-budget.
00:01:31 So it'll be interesting to see what happens to yields today.
00:01:34 And as Samina mentioned, maybe, who knows, maybe the currency too.
00:01:37 Though it's kind of steady.
00:01:39 It's the fighter.
00:01:40 It's the fighter, yes.
00:01:43 So yeah, all of those things in focus.
00:01:45 OK, I think it's 10.
00:01:46 So we should be getting those flashes up on the screen any moment.
00:01:50 Should be coming any moment.
00:01:51 But I think this is something where we keep a keen eye out for.
00:01:54 And as soon as Governor Das starts speaking, I think we cut to him and try and hear out
00:01:58 what he has to say.
00:01:59 Also, on liquidity, I think it would be interesting to see how comfortable the RBI is with keeping
00:02:04 call rates at 6.5%.
00:02:06 Remember, the call rate is higher.
00:02:09 Banks will have to raise money from depositors.
00:02:11 So the whole equation really starts moving back to the other avenues of the market.
00:02:16 They've maintained their liquidity stand.
00:02:19 We've seen various measures taken by the Reserve Bank of India in the form of VRR.
00:02:23 In fact, that's going to be important to see if they talk about those measures.
00:02:27 Could be FX swaps, could be VRR.
00:02:29 But from the look of it, that is going to be the biggest talking point.
00:02:32 At least it has been the biggest talking point amongst economists in the last couple of weeks.
00:02:37 Core inflation is up 4% at 3.8%.
00:02:40 That is comfortable for the Reserve Bank of India.
00:02:43 It will be interesting to see what they are charting out for inflation.
00:02:47 What sort of growth targets do they have in mind as well?
00:02:49 While the NSO has predicted or estimated growth of 7.3% this year and 7% next year.
00:02:59 This is the first monetary policy statement of 2024, a momentous year for the Reserve
00:03:07 Bank of India, which enters its 90th year of existence and operations on 1st April this
00:03:14 year.
00:03:15 Over the years, the Reserve Bank has established itself as a credible institution, which stands
00:03:22 for stability, trust and economic progress.
00:03:27 In recent years, it has become a pioneer in fostering innovation and technology in the
00:03:33 financial system.
00:03:36 Customer centricity and financial inclusion have always been its priorities.
00:03:42 The Reserve Bank's tireless efforts towards maintaining a fine balance among price stability,
00:03:50 financial stability and external sector stability have paid rich dividends as the country embarks
00:03:58 on a higher growth trajectory in the years to come.
00:04:03 As India gains a pole position in the new global order, the contribution of the Reserve
00:04:09 Bank is getting widely recognised both within and outside the country.
00:04:16 The global economy continues to present a mixed picture.
00:04:21 On the one hand, the odds of soft landing have increased, with inflation moving closer
00:04:26 to the target and growth holding up better than expected in major advanced and emerging
00:04:32 market economies.
00:04:35 On the other hand, the ongoing wars and conflicts and the emergence of new flash points in different
00:04:41 parts of the world, with disruptions in the Red Sea being the latest in the series, impart
00:04:48 uncertainty to the global macroeconomic outlook.
00:04:53 In this unsettled global environment, the Indian economy has performed remarkably well
00:04:59 in the recent years.
00:05:01 Growth is accelerating and outpacing most of the forecasts, while inflation is on a
00:05:08 downward trajectory.
00:05:11 At the current juncture, India's potential growth is propelled by structural drivers
00:05:17 like improving physical infrastructure, development of world-class digital and payments technology,
00:05:24 ease of doing business, enhanced labour force participation and improved quality of fiscal
00:05:33 spending.
00:05:34 Our multi-pronged, proactive and calibrated policies on the monetary, regulatory and supervisory
00:05:43 fronts have worked well to maintain and strengthen macroeconomic and financial stability.
00:05:51 Let me now turn to the decisions and deliberations of the Monetary Policy Committee meeting,
00:05:57 the Monetary Policy Committee which met on 6th, 7th and 8th of February that is culminating
00:06:05 today.
00:06:07 After a detailed assessment of the evolving macroeconomic and financial developments and
00:06:13 the outlook, the Monetary Policy Committee that is MPC decided by a 5 to 1 majority to
00:06:22 keep the policy rate unchanged at 6.5%.
00:06:27 Consequently, the standing deposit facility rate remains at 6.25% and the marginal standing
00:06:36 facility that is MSF rate and the bank rate at 6.75%.
00:06:43 The MPC also decided by a majority of 5 out of 6 members to remain focused on withdrawal
00:06:50 of accommodation to ensure that inflation progressively aligns with the target while
00:06:57 supporting growth.
00:07:01 I shall now briefly set out the rationale for these decisions.
00:07:07 The momentum in domestic economic activity continues to be strong.
00:07:12 Headline inflation after moderating to 4.9% in October rose to 5.7% in December 2023.
00:07:22 This was primarily due to food inflation, mostly vegetables.
00:07:27 The softening in core inflation that is CPI inflation excluding food and fuel continued
00:07:34 across both goods and services reflecting the cumulative impact of monetary policy actions
00:07:41 as well as the significant softening in commodity prices.
00:07:47 The uncertainties in food prices, however, continue to impinge on the trajectory of headline
00:07:54 inflation.
00:07:57 Taking into account this growth inflation dynamics and the fact that transmission of
00:08:03 the cumulative 250 basis points policy rate hike is still underway, the MPC decided to
00:08:10 keep the policy report unchanged at 6.5%.
00:08:15 The MPC will carefully monitor any signs of generalization of food price pressures which
00:08:22 can fritter away the gains in easing of core inflation.
00:08:28 Monetary policy must continue to be actively disinflationary to align inflation to the
00:08:34 target of 4% on a durable basis.
00:08:39 The MPC will remain resolute in this commitment.
00:08:44 The MPC also decided to remain focused on withdrawal of accommodation to ensure fuller
00:08:50 transmission and anchoring of inflation expectations.
00:08:58 I now propose to provide an assessment of growth and inflation.
00:09:02 Let me take off first global growth.
00:09:05 Global growth is expected to remain steady in 2024 with heterogeneity across regions.
00:09:13 Though global trade momentum remains weak, it is exhibiting signs of recovery and is
00:09:18 likely to grow faster in 2024.
00:09:22 I would like to mention that I am making several statements and the supporting data for all
00:09:27 the statements that I am making, all the sentences that I am reading out, the supporting data
00:09:32 is provided in the footnotes.
00:09:35 So therefore those of you who are interested can refer to the footnotes for the backup
00:09:40 data in support of whatever statements I am making here.
00:09:44 So let me just restart so that there is continuity.
00:09:47 Global growth is expected to remain steady in 2024 with heterogeneity across regions.
00:09:54 Though global trade momentum remains weak, it is exhibiting signs of recovery and is
00:09:59 likely to grow faster in 2024.
00:10:04 Inflation has softened considerably and is expected to moderate further in 2024.
00:10:10 Financial markets are volatile as market participants adjust their expectations on the timing and
00:10:17 pace of rate cuts by major central banks who in any case remain cautious against premature
00:10:25 easing in their fight against inflation.
00:10:29 Amidst the current headwinds, elevated level of public debt is raising serious concerns
00:10:36 on macroeconomic stability in many countries.
00:10:39 Now this is a new point which I am just introducing, which I am talking about in this MPC because
00:10:44 this aspect I think is an important aspect and it will impact the future trajectory of
00:10:50 global financial stability and global financial system.
00:10:54 So therefore this point I thought I must mention here as a part of the monetary policy statement.
00:11:00 Now amidst the current headwinds, elevated levels of public debt is raising serious concerns
00:11:06 on macroeconomic stability in many countries including some of the advanced economies.
00:11:14 Global public debt to GDP ratio is projected to reach 100% by the end of this decade.
00:11:22 The public debt levels in advanced economies in fact are much higher than those in the
00:11:28 emerging market economies.
00:11:30 The challenges of debt sustainability in an environment of high interest rates and low
00:11:37 growth at the global level can become new sources of stress.
00:11:44 Reducing debt burdens is necessary to create fiscal space for new investments in priority
00:11:50 areas including green transition.
00:11:53 Now in this context so far as India is concerned, going by the budget which has now been presented,
00:11:59 I think government is adhering to a path of fiscal consolidation and as per the projections
00:12:05 made by the International Monetary Fund also, India's that is general government, the
00:12:11 debt of both central and state governments are expected to moderate in the years to come.
00:12:17 This is just a point of information to put things in the context.
00:12:23 Domestic growth.
00:12:25 Domestic economic activity remains strong.
00:12:27 The first advance estimates placed the real gross domestic product that is real GDP growth
00:12:33 at 7.3% for 2023-24 that is for the current year, making this the third successive year
00:12:42 of growth of above 7%.
00:12:46 Going forward, the momentum of economic activity witnessed during the current year that is
00:12:51 2023-24 is expected to continue in the next financial year also that is in 2024-25.
00:12:59 Industrial activity is holding up well despite lower inflation, lower reservoir levels and
00:13:06 delayed sowing.
00:13:08 Rabi sowing has surpassed last year's level as well as the normal acreage.
00:13:14 The allied sector is also expected to provide major support to agriculture with continued
00:13:20 momentum in horticulture and fisheries.
00:13:25 Industrial activity is gaining steam on the back of improving performance of manufacturing.
00:13:32 The early results of corporates in the manufacturing sector remain upbid, driven by higher profit
00:13:39 margins.
00:13:40 The Purchasing Managers Index that is PMI for manufacturing is displaying expansion
00:13:47 along with strengthening of Future Activity Index.
00:13:51 Area sector activity is expected to remain resilient on the back of strong domestic demand
00:13:58 and stable global prospects.
00:14:02 The PMI services increased significantly in January that is January this year, suggesting
00:14:09 continuing strong expansion.
00:14:11 The buoyant demand for residential housing coupled with increased thrust on government
00:14:18 capex is expected to propel construction activity.
00:14:23 On the demand side, improving employment conditions and moderating inflation together with a rebound
00:14:30 in agricultural activity should push up household consumption.
00:14:35 Rural demand continues to gather pace, strengthening farm-level activity as reflected in declining
00:14:44 Mahatma Gandhi NREGA demand and the extension of PM Garib Kalyan Anna Yojana should further
00:14:52 support rural consumption.
00:14:55 Urban consumption remains strong on the back of improved income levels.
00:15:02 Investment cycle is also gaining momentum, is gaining steam aided by sustained thrust
00:15:08 on government capital expenditure, increased capacity utilization, rising flow of resources
00:15:16 to the commercial sector and policy support from schemes such as production linked incentive.
00:15:24 Revival in private corporate investment is also underway.
00:15:28 Our survey suggests that investment intentions of private corporates remain upbeat and both
00:15:36 services and manufacturing firms are optimistic about overall business conditions.
00:15:42 Next net external demand is also improving with narrowing merchandise trade deficit.
00:15:49 Now taking into account all these factors into consideration, real GDP growth for 2024-25
00:15:59 that is the next financial year is projected at 7%.
00:16:04 I repeat real GDP growth for 2024-25 that is next financial year is projected at 7%
00:16:12 with Q1 at 7.2%, Q2 at 6.8%, Q3 at 7% and Q4 at 6.9%.
00:16:25 The risks are evenly balanced.
00:16:29 Let me now turn to inflation.
00:16:32 Headline inflation moderated to an average of 5.5% during April to December 2023 from
00:16:40 6.7% during the whole of 2022-23.
00:16:46 Food price inflation, however, continued to impart considerable volatility to the inflation
00:16:52 trajectory.
00:16:53 In contrast, the deflation in CPI fuel, deep end and core inflation moderated to a 4-year
00:17:01 low of 3.8% in December.
00:17:05 The decline in core inflation continued to be broad-based with inflation remaining steady
00:17:12 or softening across its constituent groups and subgroups.
00:17:18 The inflation trajectory going forward would be shaped by the outlook on food inflation
00:17:24 about which there is considerable uncertainty.
00:17:28 Adverse weather events remain the primary risk with implications for the Rabi crop.
00:17:35 Increasing geopolitical tensions are also leading to supply chain disruptions and price
00:17:40 volatility in key commodities especially crude oil.
00:17:46 On the positive side, the progress in Rabi sowing has been satisfactory and augurs well
00:17:52 for the season.
00:17:54 Prices of key vegetables especially onions and tomatoes are registering seasonal price
00:18:00 correction.
00:18:02 Taking into account these factors, CPI inflation i.e. consumer price headline inflation is
00:18:11 projected at 5.4% for the current year i.e. 23-24.
00:18:17 So that is for the current year 23-24 we are projecting CPI inflation at 5.4% with the
00:18:24 fourth quarter i.e. the current quarter projection of 5%.
00:18:30 Now assuming a normal monsoon for the next year, CPI inflation for the next financial
00:18:36 year 24-25 is projected at 4.5%.
00:18:41 I repeat, CPI headline inflation for next financial year 24-25 is projected at 4.5%
00:18:51 with Q1 at 5%, Q2 at 4%, Q3 at 4.6% and Q4 at 4.7%.
00:19:01 The risks are evenly balanced.
00:19:03 Now what do these inflation and growth conditions, what do they mean for monetary policy?
00:19:10 Let me try an answer.
00:19:12 Inflation has seen a significant moderation from the highs of the summer of 2022.
00:19:22 Over the last two years, monetary policy has prioritized inflation over growth, undertaking
00:19:29 a calibrated increase in policy report by 250 basis points and withdrawal of stimulus
00:19:37 measures.
00:19:38 Monetary policy was supported by proactive supply-side measures by the government.
00:19:44 That said, the job is not yet finished and we need to be vigilant about new supply shocks
00:19:52 that may undo the progress we have made so far.
00:19:58 Online inflation has remained high and has seen considerable volatility moving in a range
00:20:03 of 4.3% to 7.4% during the current financial year.
00:20:10 Recurring food price shocks could interrupt the ongoing disinflation process with risks
00:20:17 that it could lead to de-anchoring of inflation expectations and generalization of the price
00:20:24 pressures.
00:20:25 Adding to these are the renewed flashpoints on the geopolitical front, including supply
00:20:31 chain disruptions.
00:20:33 Importantly, the CPI inflation target of 4% is yet to be reached.
00:20:41 Monetary policy in the midst of these lingering uncertainties has to remain vigilant to ensure
00:20:48 that we successfully navigate the last mile of disinflation.
00:20:54 Now the last mile of disinflation is always the most challenging and that has to be kept
00:21:00 in mind.
00:21:02 Stable and low inflation at 4% will provide the necessary bedrock for sustainable economic
00:21:09 growth.
00:21:10 This point is very important because if we are interested in the long-term growth of
00:21:16 our economy, then we need a regime of low and stable inflation.
00:21:22 That is why we remain focused on bringing the inflation, to align the inflation to the
00:21:28 target on a durable basis.
00:21:32 I would now like to focus on the liquidity and financial market conditions about which
00:21:36 there is lot of interest in the financial markets and also elsewhere.
00:21:42 After remaining in surplus during April-August 2023, system level liquidity turned into deficit
00:21:50 from September after a gap of 4.5 years.
00:21:55 Adjusted for government cash balances, potential liquidity in the banking system is still in
00:22:01 surplus.
00:22:02 And that may surprise you.
00:22:04 But adjusting for government cash balance, potential liquidity in the system is still
00:22:09 in surplus.
00:22:11 During December-January, the Reserve Bank proactively injected liquidity through both
00:22:16 the main and the fine-tuning repo operations to ease liquidity tightness in the system.
00:22:23 With government spending picking up and augmenting system level liquidity, I must mention that
00:22:29 in the recent, particularly in the second fortnight of January, government expenditure
00:22:36 was sustained.
00:22:38 But I think there has been a significant pickup from the second fortnight of January and also
00:22:42 we are witnessing the same in February.
00:22:47 So with government spending picking up and augmenting system level liquidity, the Reserve
00:22:52 Bank undertook six fine-tuning variable rate reverse repo auctions, that is VRRR auctions
00:23:00 during February 2 to February 7, 2024 to absorb surplus liquidity.
00:23:08 Central market segments have adjusted to the evolving liquidity conditions in varying degrees.
00:23:14 While the short-term rates have fluctuated, long-term rates have remained relatively stable,
00:23:22 reflecting better anchoring of inflation expectations as indicated in the softening of term spread
00:23:29 in the government securities market.
00:23:32 In the credit market, however, monetary transmission remains incomplete.
00:23:37 Let me reiterate, and this is very important, let me reiterate that our policy stance is
00:23:43 in terms of interest rate, which is the principal tool of monetary policy in the current framework.
00:23:51 Our stance of withdrawal of accommodation should be seen in the context of incomplete
00:23:57 transmission and inflation ruling above the target of 4% and our efforts to bring it back
00:24:04 to the target on a durable basis.
00:24:08 So far as liquidity conditions are concerned, these are being driven by exogenous factors,
00:24:18 which are likely to correct in the foreseeable future, aided by our market operations.
00:24:25 On our part, the Reserve Bank remains nimble and flexible in its liquidity management through
00:24:31 two-way main and fine-tuning operations in both repo and reverse repo.
00:24:41 So you would have noticed we have done two-way market interventions, both repo and now reverse
00:24:46 repo and we have been very nimble even during one particular day like yesterday and the
00:24:54 day before.
00:24:55 On a single day we conducted two VRR, VRRR auctions on a single day, that was seen yesterday
00:25:02 and day before and that goes to show that we are nimble, we are nimble and swift in
00:25:07 our response to the evolving liquidity conditions.
00:25:12 Now I would like to emphatically state here that we will deploy an appropriate mix of
00:25:18 instruments to modulate both frictional and durable liquidity so as to ensure that money
00:25:26 market interest rates evolve in an orderly manner and financial stability is maintained.
00:25:33 The reversal of liquidity facilities under both SDF and MSF even during weekends, which
00:25:41 we announced in the last, that is in December policy statement, has actually facilitated
00:25:46 better funds management by the banks.
00:25:50 As of February 7, 2024, the Indian rupee has remained stable compared to both its emerging
00:25:58 market peers and even a few advanced economies.
00:26:03 In terms of coefficient of variation, the Indian rupee exhibited the lowest volatility
00:26:09 in 2023-24 as per the data available between April to January of the current financial
00:26:17 year.
00:26:18 Now, this I am saying compared to the corresponding period in the previous three years.
00:26:25 Let me reiterate that the exchange rate of the Indian rupee is market determined.
00:26:31 Its relative stability in the recent period, despite a stronger US dollar and elevated
00:26:38 US treasury yields, reflects the strength and stability of the Indian economy, its sound
00:26:46 macroeconomic fundamentals, financial stability and improvements in India's external position,
00:26:54 particularly the significant moderation in current account deficit, comfortable foreign
00:27:00 exchange reserves and return of capital flows.
00:27:03 Now, the confluence of all these factors put together have ensured that the exchange rate
00:27:10 of the Indian rupee has remained fairly stable over the last one year or so.
00:27:18 I would now like to touch upon financial stability.
00:27:22 The domestic financial system remains resilient with healthy balance sheets of banks and financial
00:27:28 institutions.
00:27:30 The financial parameters of non-banking financial companies that is NBFCs are also improving
00:27:36 in tandem with those of the banking system.
00:27:40 Good governance, robust risk management, sound compliance culture and protection of customers'
00:27:49 interest are of paramount importance for the safety and stability of the financial institutions
00:27:56 as well as that of individual financial institutions.
00:28:01 The Reserve Bank lays great emphasis on these aspects.
00:28:06 We expect the regulated entities of the Reserve Bank to accord the highest priority to these
00:28:13 functions.
00:28:15 External sector is the next area on which I would like to touch upon.
00:28:22 India's current account deficit declined sharply to 1% of GDP in the second quarter of 2023-24
00:28:30 that is second quarter of the current financial year from 3.8% in the second quarter of the
00:28:37 previous year.
00:28:39 Going ahead, the net balance under services and remittances is expected to remain in large
00:28:45 surplus, partly offsetting the trade deficit.
00:28:49 India's services exports remained resilient in October to December this year, driven by
00:28:57 software, business and travel services.
00:29:01 Moreover, with around 10.2% share in world telecommunications, computer and information
00:29:11 services exports, India is a significant player in the world software business.
00:29:18 According to the World Bank, with an estimated US dollar 135 billion inward remittances in
00:29:26 2024, I repeat, the World Bank estimates the inward remittances for India to be in the
00:29:32 order of US dollar 135 billion in 2024.
00:29:38 Now with this, India would remain the largest recipient of remittances globally.
00:29:44 Thus, current account deficit for both 2023-24 and 2024-25 is expected to be eminently manageable.
00:29:56 On the financing side, net foreign direct investment stood at US dollar 13.5 billion
00:30:02 in April to November 2023 as compared with US dollar 19.8 billion a year ago.
00:30:11 International portfolio investment i.e. FPI investment witnessed a sharp turnaround during
00:30:17 2023-24 i.e. current year up to February 6 with net FPI inflows of US dollar 32.4 billion
00:30:28 as against net outflows of 6.7 billion a year ago.
00:30:35 Net accretions to non-resident deposits and net inflows under external commercial borrowings
00:30:41 were also higher during the current year.
00:30:44 As on February 2, 2024, India's foreign exchange reserves stood at US dollar 622.5 billion.
00:30:57 Vulnerability indicators suggest greater resilience of India's external sector.
00:31:02 We are confident of comfortably meeting all our external financing requirements.
00:31:08 I shall now announce certain additional measures and some of these measures are very important,
00:31:15 so I request your patience.
00:31:27 The first measure I wish to announce is review of the regulatory framework for electronic
00:31:32 trading platforms.
00:31:34 The Reserve Bank's Extent Regulatory Framework for Electronic Trading Platforms was issued
00:31:40 in 2018.
00:31:42 In view of the subsequent developments in markets, products and technology, a revised
00:31:49 regulatory framework for electronic trading platforms will be issued for stakeholders'
00:31:58 feedback.
00:32:00 The next announcement relates to hedging of gold price risk in the OTC market i.e. over-the-counter
00:32:07 market in the International Financial Services Centre (IFSC).
00:32:13 In December 2022, the Reserve Bank had permitted resident entities to hedge their gold price
00:32:20 risk in recognized exchanges in the IFSC.
00:32:24 It has now been decided to also allow resident entities to hedge the price of gold in the
00:32:40 OTC segment in the IFSC.
00:32:43 This will provide more flexibility to resident entities in hedging their exposure to gold
00:32:49 prices.
00:32:51 The next announcement is actually very important and has far-reaching consequences, particularly
00:32:57 it is something which will really benefit the small borrowers from the lending sector,
00:33:03 from banks and other entities.
00:33:05 At present, and that relates to key fact statement i.e. KFS for retail and MSME loans and advances.
00:33:16 At present, the loans and advances availed by borrowers apart from including the rate
00:33:21 of interest also include other fees and charges such as the processing fees, documentation
00:33:28 charges etc.
00:33:30 So as a result, what happens is that the customer, he knows that the loan carries an interest
00:33:35 of so much percentage, but then there are other charges and fees etc. which he pays
00:33:42 upfront.
00:33:43 Now, that also needs to be loaded into the actual interest rate.
00:33:47 So the customer has a clear idea that what is the actual annualized interest rate that
00:33:54 he pays and this is something on which as you are aware, as I have said a little earlier,
00:33:59 customer centricity is something on which the Reserve Bank lays a great emphasis in
00:34:04 the overall public interest.
00:34:06 Now to enhance transparency in disclosure of such information i.e. information on various
00:34:11 charges, fees etc., the Reserve Bank had mandated certain categories of lenders to provide the
00:34:19 borrower a key fact statement i.e. KFS containing essential information such as all inclusive
00:34:26 annual percentage rate and also details of the recovery and grievance redress mechanism.
00:34:35 The requirement of the key fact statement is now being extended to cover all retail
00:34:41 and MSME loans.
00:34:43 This measure will lead to enhanced transparency in lending and will enable customers in making
00:34:51 informed decisions.
00:34:53 The circular will be issued separately.
00:34:55 Obviously, we have to give some time to the banks to comply with these requirements because
00:35:01 quite a few preparatory action needs to be taken at the end of the banks.
00:35:07 The next announcement relates to enhancing the robustness of AEPS.
00:35:12 Adhar Enabled Payment Systems i.e.
00:35:14 AEPS has played an important role in financial inclusion by enabling customers to make digital
00:35:21 payment transactions through service providers such as business correspondents.
00:35:28 In their significance, it is proposed to streamline the process for onboarding of AEPS service
00:35:35 providers and introduce some additional fraud risk management measures.
00:35:41 This measure will further strengthen the security of the AEPS system and enhance its robustness.
00:35:49 The next announcement relates to principle-based framework for authentication of digital payment
00:35:54 transactions.
00:35:55 Over the years, the Reserve Bank has proactively facilitated introduction of various mechanisms
00:36:02 such as additional factor of authentication for securing digital payments.
00:36:07 While no particular mechanism was specified by the Reserve Bank, SMS-based OTP i.e.
00:36:15 One Time Password has become very popular.
00:36:18 With technological advancements, however, alternative authentication mechanisms have
00:36:23 emerged in recent years.
00:36:26 Therefore, to facilitate adoption of alternative authentication mechanisms for enhancing the
00:36:32 security of digital payments, it is proposed to put in place a principle-based framework
00:36:39 for authentication of such transactions.
00:36:43 The next and the final announcement, the last announcement relates to introduction of programmability
00:36:49 and offline functionality in Central Bank Digital Currency Pilot Projects.
00:36:56 The CBDC i.e.
00:36:57 Central Bank Digital Currency Retail, the CBDC Retail Pilot currently enables person-to-person
00:37:04 and person-to-merchant transactions.
00:37:07 It is now proposed to enable additional functionalities of programmability and offline capability
00:37:14 in CBDC retail payments.
00:37:17 Programmability will facilitate transactions for specific or targeted purposes, while offline
00:37:25 functionality will enable these transactions in areas with poor or limited internet connectivity.
00:37:32 I now propose to conclude.
00:37:37 The Indian economy is making confident progress on a strong, sustained and transformative
00:37:44 growth path.
00:37:46 Public and international investors are reposing greater confidence on India's economic prospects.
00:37:53 In our assessment, the current setting of monetary policy is moving in the right direction
00:37:59 with growth holding firm and inflation trending down to the target.
00:38:05 Therefore, much has been achieved, but we must remain vigilant.
00:38:11 Policymaking during uncertain times has to be based on a continuous assessment of the
00:38:17 incoming data and its implications for the evolving outlook.
00:38:23 We reaffirm our commitment to bring down inflation to the target of 4% in a timely and sustainable
00:38:30 manner.
00:38:31 Price and financial stability are the foundations for strong, sustainable and inclusive growth.
00:38:39 Our endeavour all along has been to take a holistic approach to keep the economy in balance.
00:38:47 We must not only preserve the hard-earned strength and stability of the Indian economy,
00:38:53 but also build on this further for a long haul of higher growth with price and financial
00:39:00 stability.
00:39:01 In the current environment, what Mahatma Gandhi said long ago remains very relevant and I
00:39:07 quote, "I am moving cautiously, watching myself at every step, but there is the fixed
00:39:22 determination behind every act of mine."
00:39:26 Thank you.
00:39:27 Namaskar.
00:39:28 Well, that's the policy.
00:39:32 And before we go to our guests, a quick summation from me and Samina.
00:39:36 What stood out for me, no change in stance to my mind, that's the headline.
00:39:40 CPI inflation seen at 5.4% for FY25, 4.5% in FY25 and mentioning that the job is not
00:39:47 finished because need to be vigilant on new supply shocks and well, interestingly, a large
00:39:52 mention on debt sustainability for the world at large and how it could become a new source
00:39:57 of stress for the world.
00:39:58 I mean, in an EM central bank talking about the message for the world and real GDP growth,
00:40:04 5.3% FY24, 7% FY25, which would make it the fourth consecutive year of growth of 7% or
00:40:10 above.
00:40:11 Right.
00:40:12 And also Neeraj, they were pretty explicit in stating that they are managing liquidity
00:40:15 in a pseudo manner any which way.
00:40:17 So after September, and that's what the governor indicated, that system liquidity had turned
00:40:23 into a deficit after a four and a half year gap, which we've actually seen and witnessed
00:40:27 over the last couple of months.
00:40:29 But after adjusting for government cash balances, potential liquidity in the banking system
00:40:34 is still in the surplus.
00:40:35 And that's what the governor said.
00:40:36 They've also said they're nimble footed and they will manage liquidity with repo and reverse
00:40:41 repo.
00:40:42 So the pseudo balancing of liquidity still remains the only way to manage liquidity.
00:40:48 Their growth targets have of course been in line with what the NSO has said.
00:40:52 FY25, the estimate is 7% for FY24 stands at 7.3%.
00:40:57 Inflation I'll just quickly break those numbers down for you.
00:40:59 So you have some perspective on what it is.
00:41:02 But of course, inflation as well is an unfinished task is what the governor said.
00:41:07 Neeraj Gambhir, Group Executive, Treasury, Markets of Axis Bank and M. Kamakoti, CEO
00:41:13 of City Union Bank joins in.
00:41:14 Neeraj, I'll start with you first.
00:41:17 Are you surprised?
00:41:19 No change in policy, no change in stance and no major announcements on managing liquidity
00:41:25 either.
00:41:26 What did you make of these comments?
00:41:28 In line, you think, or there's a little bit of surprise because while they talked about
00:41:32 managing liquidity, they've largely said that they've been doing it and they're nimble footed
00:41:36 and will do what it takes when it takes.
00:41:40 Thanks for having me on the show.
00:41:41 I think it's broadly on the expected lines, both on growth and inflation.
00:41:46 In fact, I was a little bit positively surprised by the sort of assurance or, you know, in
00:41:54 some senses, the confidence that the IBI governor has on 7% growth for next year.
00:42:00 Our own estimates are for a little lower, say about 6.5%.
00:42:03 Nevertheless, it still continues to be another, or it will most likely be another year of
00:42:08 very strong economic growth.
00:42:10 And hence the sort of, I would say, reflection on the fact as to how fast you need to adjust
00:42:16 rates.
00:42:17 On liquidity, yes, we have seen Reserve Bank pretty active in the markets.
00:42:22 We have seen over the last week itself, multiple, you know, repo and reverse repo options being
00:42:27 done to make sure that the system liquidity stays.
00:42:30 What the governor has said is not a new information.
00:42:33 We all know that there is a very large government balance that sits there, which is causing
00:42:38 this frictional liquidity in the banking system.
00:42:40 The challenge is that this frictional liquidity shortage in the banking system is causing
00:42:44 the short term rates to actually spike up quite sharply.
00:42:47 We've seen three months CD rates go up to as high as 7.8%, and that is obviously impacting
00:42:53 in the cost of funds for the banks.
00:42:54 So I think, I'm hoping that with this renewed set of assurances that the governor has given,
00:43:00 there will be some cooling off of these short term rates.
00:43:03 And I think he pointed out towards the fact that there has been some volatility in the
00:43:06 short term money market rates.
00:43:07 So I think that's the key thing.
00:43:09 If the overnight rates settle towards 6.5% and the short term money market rates start
00:43:14 cooling down, then I think this policy would have achieved what we would have liked to
00:43:18 see in the policy.
00:43:21 Mr. Kamagodi, did no change in stance surprise you or are you in sync with what Neeraj Gambhir
00:43:26 just mentioned?
00:43:27 Yeah, just to add what Mr. Gambhir said, you also heard a statement which clearly said
00:43:34 that probably from the earlier policy announcements and all, you had more discussion on the Arjuna
00:43:43 Sai on the inflation.
00:43:45 And now it has been clearly spelled that the economy will be now getting ready for the
00:43:52 growth, that all sorts of other actions will start and all.
00:43:57 So it is definitely a little bit, we are positively surprised that probably happening two months
00:44:04 earlier.
00:44:05 Probably we were expecting this in the next policy, but good that the support for growth
00:44:13 will be more from where we are now.
00:44:15 That's a positive point here.
00:44:18 All other rates and all are on the expected line.
00:44:23 Neeraj, I know while we are focusing on a whole bunch of global cues and the FISC and
00:44:28 the budget and the market borrowing, but the fact still remains that we will, we have and
00:44:35 we should be taking a cue from what the Federal Reserve does.
00:44:39 The fact that that market rate cut expectation has now been pushed forward.
00:44:44 Do you feel like until the Fed moves, the RBI, even if conditions are conducive, will
00:44:50 be unable to move because the rate differential is very critical for an emerging market like
00:44:54 ours?
00:44:55 Yes, it is.
00:44:56 And hence, what the Fed does is also of quite a bit importance.
00:45:03 Rate cut expectations in US have been pushed back by at least six months.
00:45:07 I think the market was hoping to have it in the first quarter in March policy.
00:45:13 Now we are looking at May, June and even probably later, given the recent speed of data that
00:45:18 we've seen in US.
00:45:19 So, yes, that does make the bar for a rate cut to move higher in India particularly.
00:45:27 And also the fact that our growth continues to be strong.
00:45:31 The task on inflation front is still not complete.
00:45:34 We are likely to see an inflation outcome for this fiscal and the next fiscal, which
00:45:38 is going to be higher than the target of 4 percent.
00:45:42 Basically means that Reserve Bank has no real hurry or a reason to cut rates anytime soon.
00:45:47 And I think both of these factors need to be taken into account simultaneously.
00:45:52 Neeraj, that brings me to the next question, which is a little bit of a conundrum in my
00:45:56 head at least.
00:45:57 So co-inflation has been easing in line with what the governor or the RBI would like, recorded
00:46:03 at 3.8 percent.
00:46:05 The fact remains that if it continues to fall and gets closer to 2 percent, this becomes
00:46:09 bad for the economy.
00:46:11 On the other hand, and of course, because of that, the headline inflation is also cooled
00:46:15 off.
00:46:16 But vegetable inflation continues to be a sore point.
00:46:19 Non-vegetable inflation has also been going up over the last four years.
00:46:22 So what do you think in your opinion needs to be done to tackle inflation in that sense?
00:46:28 Because you can't and the only thing the RBI can really tackle is co-inflation.
00:46:32 So we don't want that to fall off too easily, right?
00:46:36 But at the same time, if the headline inflation continues to stay high and volatile, and remember
00:46:42 food is a large part of India's consumption basket, so can't ignore it that easily.
00:46:48 And if the food prices continue to stay volatile, it affects people's expectations about the
00:46:53 future inflation.
00:46:54 And hence, it is not very easy for a central bank like India where headline inflation is
00:47:00 the target to start cutting rates when the overall inflation or the headline inflation
00:47:06 is much beyond the target.
00:47:07 So I think the Reserve Bank can take comfort from the fact that the co-inflation is low
00:47:12 and hence, it is not a situation of overheating in the economy.
00:47:17 It is more of a supply side issue in the vegetable and food basket and products, but cannot really
00:47:23 start cutting rates till such time the overall headline inflation starts pulling off trends.
00:47:28 By the way, just take a quick detour and mark risk assets by and large before we get in
00:47:34 Anubhati Saha in the conversation as well.
00:47:37 The Nifty, the Bank Nifty, both are off.
00:47:39 I mean, we have seen the PSU banks come off because there was a bit of a rally, but let's
00:47:44 just mark the markets about not too much, but a bit lower, but the banks and the PSU
00:47:48 banks in particular would be the ones.
00:47:50 Bank Nifty is in the green, but the PSU banks have certainly come off.
00:47:54 So that is to be kept in mind.
00:47:55 A PSU bank index actually by and large okay, a few banks have certainly come off.
00:47:59 Anubhati Sahay of Standard Chartered Bank joins us right now on the show as well.
00:48:03 Anubhati, good having you.
00:48:04 Thanks for joining in.
00:48:05 Anything surprised you?
00:48:06 I mean, one reference being made to external shocks in a meaningful way, particularly the
00:48:11 debt that the developed world stands in and how that is a source of potential future shocks.
00:48:17 Yeah, sure.
00:48:19 I think there were two points which were of great interest.
00:48:23 One, for the first time we have seen a dissenter emerging and probably voting for a cut.
00:48:29 This we have not seen in our senses while there was just one vote in this particular
00:48:34 meet.
00:48:35 As we move further into 2024 and probably by June of 2024, we are likely to see six
00:48:41 out of six votes in favor of a cut.
00:48:44 A fair bit of caution today, well justified where the world stands today with the tensions
00:48:49 in Middle East and especially with the data surprising on the higher side in the US economy
00:48:54 and probably rate cuts been deferred there.
00:48:57 So fair bit of cautiousness, which was a surprise, but the dissent for a cut was an equal surprise
00:49:05 to us.
00:49:06 Otherwise, broader on the policy decision, more or less in line with expectation.
00:49:14 On your point about public debt to GDP, I think it's a very important point which the
00:49:18 governor brought to the attention of the market.
00:49:21 If we talk about the global level, there is a very high level of public debt while it
00:49:27 can be managed without impacting the markets a lot, especially if we look at the developed
00:49:31 side, developed markets.
00:49:33 It becomes a constraining factor for a lot of emerging economies, including India.
00:49:39 And in case of India, while we all have applauded the budget, I think the public debt to GDP
00:49:44 is something which is a factor on the minds of policymakers and to a great extent, there
00:49:50 is a great deal of focus to bring it down as soon as possible to ensure that the issue
00:49:57 with the rating agencies about high public debt to GDP gets addressed sooner rather than
00:50:02 later.
00:50:03 Okay.
00:50:04 Mr. Kawakodi, small things, but he mentioned about how two or three very important moves
00:50:08 taken at the end of, virtually at the end of the policy, including allowing, I mean,
00:50:14 resident entities to hedge price of gold, extending KFS requirements for all retail
00:50:18 and MSME loans, because it's mandated earlier only for certain class of lenders.
00:50:23 Any thoughts on those three or four announcements that were made?
00:50:26 Yeah, particularly on the, I mean, key factor statement is there for some time, but including
00:50:35 all charges with the interest rate, let's say we have to think over that and probably
00:50:41 some amount of selling on the GST will also be there because if it is included in the,
00:50:48 let's say interest rate, if it is a charge, you have GST over and above that.
00:50:53 And if it is in the, included in the interest, you don't have the, let's say GST part on
00:50:58 that.
00:50:59 So, some amount of, let's say, thoughts should be put over there to take it forward, but
00:51:05 it will be definitely, let's say, beneficial to the customers and overall transparency
00:51:11 will be getting better and better.
00:51:13 Right.
00:51:14 We also have with us KK Mistry, former VC and CEO of HDFC Bank joining in.
00:51:19 Hi, Mr. Mistry, thank you very much for taking the time to talk to us this morning.
00:51:24 No surprises on policy, not too much of a change in the tone or the stance, more or
00:51:30 less on expected lines or would you have expected or liked a slight change in stance, commentary
00:51:37 maybe?
00:51:38 She hasn't even, he hasn't even said much on liquidity in that case.
00:51:42 I don't think I would have expected too much of a change given the fact that the external
00:51:47 environment continues to remain uncertain.
00:51:49 Like you've seen that, you know, you have three wars going on, two wars going on and
00:51:55 one near war going on.
00:51:56 You have this Gaza issue, you have the Ukraine-Russia issue, you have this, you know, conflict between
00:52:03 the US and Iran.
00:52:04 So, in that kind of an environment, things can be very uncertain.
00:52:09 You could have a sudden change in oil prices, sudden change in sentiment.
00:52:13 So, given all of that, I think RBI will continue to be watchful.
00:52:17 My sense is by the time we come to, let's say, May or so, around May, RBI will get a
00:52:22 better fix on where they expect the monsoons to be and whether we expect a normal monsoon
00:52:27 and therefore normal, you know, agricultural output and then maybe act in terms of lowering
00:52:34 interest rates.
00:52:35 But I still believe that a bunch of macro environment staples civilizes and if we, you
00:52:41 know, we don't have any surprises on the monsoon front, we could look at a rate cut coming
00:52:46 sometime in May, maybe even in May June.
00:52:49 Mr. Mistry, good morning.
00:52:51 Niraj here.
00:52:52 Just wondering, did the confidence of the Reserve Bank of India on growth surprise you
00:52:56 precisely for the reasons that you mentioned with the conflicts going in and world growth
00:53:00 slightly looking dodgy, a 7% number that the Reserve Bank has said.
00:53:04 Did that surprise you?
00:53:06 No, not at all.
00:53:07 If you ask me, if you ask me personally and I've said this before also, in my view, a
00:53:13 growth may even be slightly higher than 7%.
00:53:16 You know, we are not that much dependent on global factors as the rest of the world in
00:53:21 the sense that the economy is largely domestic economy and as long as we are creating jobs,
00:53:26 there are people are, you know, people have jobs, they have income, they are spending
00:53:30 money, consumption is there, manufacturers are incentivized to produce more because they
00:53:35 are producing more, they are hiring more people.
00:53:37 So the economy is on a roll and there's a multiplier effect to these things.
00:53:41 So I'm not at all surprised.
00:53:42 In fact, I would believe in my opinion that we would end up with a number higher than
00:53:47 7.
00:53:48 Mr. Mistry, appreciate that.
00:53:49 Thank you so much for taking the time out and being with us.
00:53:52 Really appreciate your time.
00:53:53 My colleague Vishwanath Nair is now standing by with the key highlights of the policy and
00:53:57 what's that for him.
00:53:58 Vishy.
00:53:59 Rightly that.
00:54:00 So we expected a dovish sort of policy, but then of course, the RBI governor came in and
00:54:07 delivered a slightly more hawkish tone in his commentary.
00:54:12 Now, of course, the point that we have to watch out for is that sixth policy again,
00:54:18 status quo, the stance remains the same as withdrawal of accommodation.
00:54:23 But the RBI governor's main point is that there is a lack of transmission.
00:54:28 There is an incomplete transmission happening in the credit market, which for which reasons
00:54:32 he didn't explain during his speech, maybe later in the press conference he will explain
00:54:36 it.
00:54:37 But the other main point is that the inflation is still away from the 4 percent target.
00:54:42 So those two things are the most important driving factors of what future decision making
00:54:47 on the multi-policy front are going to be.
00:54:49 Now, if you look at where the RBI is projecting inflation for this financial year as well
00:54:53 as the next financial year, FY25 is expected to be around 4.5 percent.
00:54:58 Inflation hits 4 percent at some point in September.
00:55:01 And then later on in the following two quarters of the next financial year, you will still
00:55:06 see inflation remain higher than the 4 percent target.
00:55:08 So that's something that you need to watch out for and how that influences the RBI and
00:55:14 the NPC's decision making.
00:55:16 Liquidity front, I heard some media say that they didn't make any clear announcements on
00:55:20 liquidity.
00:55:21 That's true.
00:55:22 They didn't.
00:55:23 But what the RBI did say is that they will continue to do two way sort of move, which
00:55:26 is infusing liquidity when needed and absorbing excess liquidity whenever the situation warrants
00:55:32 it.
00:55:33 So the RBI remains nimble as far as managing the system liquidity is concerned.
00:55:36 On the growth front, the target of about 7 percent for FY25 sounds of a very, very strong
00:55:43 sort of growth momentum.
00:55:44 The RBI governor has said that the strong growth momentum we saw in FY24 is likely to
00:55:49 continue next year.
00:55:50 Now, apart from all of these rate related decisions, I think two important things that
00:55:56 the RBI governor did talk about.
00:55:58 One was on the key fact statement, which at this point in time was only on for digital
00:56:04 lenders who need to issue a key fact statement to the customers, which details all the interest
00:56:11 rate as well as other costs involved with a loan.
00:56:13 So now that will be extended to all retail and MSME loans.
00:56:16 This is intended to bring in more transparency.
00:56:18 But of course, this raises the compliance costs for banks and NBFCs who traditionally
00:56:23 did not do digital lending.
00:56:25 The other important bit is on the CBDC front, the RBI is proposing to bring in additional
00:56:30 programmability.
00:56:31 Now, to my mind, that's a bit of a dicey area because the whole intent of bringing in E-Rupee
00:56:38 or CBDC is to make digital rupee the equivalent of paper currency.
00:56:43 Now, if you bring in additional programmability, which is to say that this money can only be
00:56:48 used for a specific purpose.
00:56:50 If you bring in that kind of programmability, then you take away from that fungibility factor
00:56:54 of the paper currency and that takes it away from the commonality between digital rupee
00:57:00 as well as the paper rupee.
00:57:02 These to my mind were the most important sort of factors to watch out for as far as the
00:57:07 monetary policy announcement is concerned.
00:57:09 Let's see what happens during the press conference.
00:57:11 Specifically, I would really like to know what the RBI Governor meant by incomplete
00:57:15 transmission and what the factors behind those are.
00:57:18 Right.
00:57:19 Thank you, Rishi, for that.
00:57:20 Of course, Gus, you got to run for the press conference, but we will catch you soon again.
00:57:25 Neeraj, explain this to me and we're a little perplexed at this stage.
00:57:29 There was really nothing too exciting in that sense in terms of the policy and I'm not saying
00:57:35 that's a bad thing.
00:57:37 No change in policy, no, not the Governor, not saying dovish at all.
00:57:40 In fact, highlighting global concerns that could play or could be the jack in the pack.
00:57:46 Why I don't know if you've got a cue on this and I know equity price is just one part of
00:57:50 it, but PSU Bank specifically are having a field day this morning.
00:57:55 What are they getting excited about?
00:57:56 Anything that you found that we haven't managed to catch?
00:57:59 No, nothing new.
00:58:00 I mean, I haven't really caught on to anything which I think should have a particularly big
00:58:05 impact on PSU Bank shares.
00:58:07 Could be one of those days when the market is just kind of looking at a particular segment.
00:58:12 But in the policy per se, I did not see anything which has a positive or negative bias for
00:58:17 a particular set of banks.
00:58:18 Anupati, I want to come to you now.
00:58:21 You did say that you're largely in line with what was expected, but anything more that
00:58:25 you'd have liked to see in terms of commentary?
00:58:29 There were some parts of the markets expecting maybe a slightly more dovish commentary, which
00:58:37 in my opinion hasn't happened and also with liquidity per se, the Governor has maintained
00:58:42 that they are nimble-footed.
00:58:43 They will do what it takes, when it takes.
00:58:46 Nothing too detailed in terms of liquidity management.
00:58:49 Were you a little disappointed on that front?
00:58:52 On liquidity, I won't say that there were disappointments.
00:58:57 Market always expects very explicit guidance or very strong measures when it comes to liquidity
00:59:03 management in every single policy meet.
00:59:07 But if you go barring the ICRR announcement, which happened in the August policy decision,
00:59:14 otherwise very strong statements of liquidity are usually not made during the policy days.
00:59:23 They are made out of the policy days.
00:59:24 So I don't think I would say that I'm disappointed to say so.
00:59:29 Whatever is required, I think RBI will continue to do on the way they have been doing over
00:59:35 the past several weeks.
00:59:37 On your point about dovishness versus hawkishness, yes, we expected a little bit more acknowledgement
00:59:46 on the way domestic inflation has panned out, especially given where core inflation is.
00:59:51 And in fact, if we just step back and look at some of the comments which were made by
00:59:56 the Governor earlier in the year at Davos, his first interview where he sounded a lot
01:00:01 more positive about the domestic inflation trajectory, that was missing in this policy
01:00:11 statement.
01:00:12 So our sense is this is primarily driven not by some fresh development between Jan and
01:00:17 Fed in the Indian economy, but probably is weighed down more by what's happening globally.
01:00:22 As I mentioned earlier, Middle East tension needs to be watched out because it has a lot
01:00:27 of implication for oil prices.
01:00:31 And also if you look at the US economy and the pushback which the market in general has
01:00:40 got on rate cut expectations from March to May, I think these are very important factors
01:00:45 which any emerging central bank governor will have to take into account.
01:00:49 So more cautiousness is primarily driven by global factors, in my view, rather than anything
01:00:55 changing on the negative side domestically.
01:00:58 Got it.
01:00:59 Anupati and Hiraj Gambhir, lovely talking to both of you.
01:01:03 Thank you so much for taking the time out and being with us.
01:01:05 Mr. Kanimodi, I have one final question for you, and that is around whether the policy
01:01:13 statement in some sense leads anything about growth for the banking sector, because there
01:01:21 are a lot of question marks around credit deposit ratio, any which ways, and the extent
01:01:26 of private capex and what it will do to growth per se.
01:01:31 See even though you don't hear anything very specific or very poignant, the general message
01:01:41 that, okay, like what I, like I said, I'm slightly different from my previous speakers,
01:01:51 in the sense that, like say now, like, okay, the period of focusing on the inflation targeting,
01:01:56 okay, there are multiple statements, but directionally things are pulling up.
01:02:01 So eventually the, at least the light at the end of the tunnel is visible and going forward
01:02:07 it will be sooner than later we'll start seeing, like say, the interest rate coming down, which
01:02:13 should propel growth.
01:02:14 And there was a specific statement which I could hear, which said something like, like
01:02:21 from inflation targeting now we are, like say, we'll start focusing how to support growth
01:02:29 and something like that.
01:02:30 So things have to, like say, we should be getting for better days to come.
01:02:36 Mr. Kamakhudi, I would have loved to talk to you longer, but we are sadly out of time
01:02:41 this morning.
01:02:42 In the meantime, so thank you very much for joining us.
01:02:44 But in the meantime, the markets are almost holding steady.
01:02:47 Banks are having a great day.
01:02:49 I guess it's a trading day for PSU Banks.
01:02:52 Nifty is actually inch lower.
01:02:54 So my bad.
01:02:55 Private banks are down, but PSU Banks are doing well.
01:02:58 Private banks are lower.
01:02:59 The Nifty itself is off.
01:03:00 PSU Banks, stocks like SPI are looking exceptionally well placed in trade as we speak.
01:03:06 Yeah.
01:03:07 Even PSU Banks has come off just a little bit in the last couple of minutes.
01:03:09 SPI trades the gain of 4%.
01:03:11 But what is catching our attention is LIC has taken its peers along higher this morning.
01:03:16 LIC trades with a gain of 8%.
01:03:19 The New India Assurance is up 11.5%.
01:03:21 General Insurance GIC is also trading with a massive gain of about 12%, turning out to
01:03:27 be one of the top gainers on the Nifty 500.
01:03:29 So those counters, again, catching our attention.
01:03:32 Neeraj, I'm not sure whether this is just pure trade or there is more on the…
01:03:35 I think the data that came out maybe late, late hour yesterday.
01:03:39 So data, what the Prime Minister said and LIC earnings, I guess there are three good
01:03:43 enough reasons for the insurance back to trade firm.
01:03:46 With that, completely out of time, but thanks for joining.
01:03:48 There's a lot more programming on the other side, so stay tuned.
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