Finance Minister Nirmala Sitharaman (left) with RBI Governor Shaktikanta Das in a customary post-budget meetin … Read More
NEW DELHI: Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said momentum is gathering pace on credit growth and expressed hope that transmission of rate cuts will improve further in the coming days.
His comments come against the backdrop of concerns over growth of the economy, which has also registered spike in inflation and slowdown in industrial production.
Addressing the media after RBI board meeting, which was also addressed by finance minister Nirmala Sitharaman, Das said he does not agree that rate cut transmission is plateauing out.
Transmission of rate cuts is slowly and steadily improving and it is expected to improve further, he said.
“We do expect credit growth to pick up in coming months,” Das said, adding that momentum is gathering pace on this front.
On February 6, the six member-Monetary Policy Committee (MPC) headed by Das, for the second meeting in a row, kept repo rate unchanged at 5. 15 per cent but maintained the accommodative policy stance which implies it was biased in favor of cutting rate to boost growth.
“Monetary policy framework is in operation for the last 3 years. Internally, we are reviewing and analyzing how the MPC framework has worked. At an appropriate time, if required, we’ll have dialogue and discussion with the government. At the moment it is under review within RBI, “the RBI governor said.
He further added that RBI’s growth projection of 6 per cent for the next year is in line with Economic Survey projection.
Prior to going for status quo on rates in December, the central bank had slashed rates five consecutive times that resulted in a cumulative 1. 90 per cent decline in repo rate.
“Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo, “the MPC had said.
On Supreme Court’s order to telecom companies regarding AGR (adjusted gross revenue) dues, Das said it will have internal discussions in case there are any issues arising out of the order.
The RBI governor did not offer any specific comments about the order – which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies.
On Friday, the Supreme Court threatened contempt proceedings against top executives of Bharti Airtel, Vodafone Idea and other telecom firms for failing to comply with its directive to pay an estimated Rs 1. 728 lakh crore in past dues.