However, on a macroeconomic level, most corporate leaders felt that the RBI governor has adopted a cautious approach and the policy was along expected lines.
Mahindra & Mahindra executive director Bharat Doshi feels that the RBI governor has continued to maintain his sure and steady approach to monetary management.
The governor’s signature is in avoiding dramatic and spectacular effects and going in for the low-key quintessential central banker approach to business on hand, felt Mr Doshi. "He has of course cut the CRR by 50 basis points as was expected by in the market. Had he not done this, he would have hit the headlines," he added. From the industry’s perspective, the transparency proposed in the PLR regime of banks was welcome, felt Mr Doshi.
Grasim president and chief financial officer (CFO) DD Rathi feels that the changes in the call money market would work favourably for corporates and corporate debt.
"The cut in CRR and deferred interest rates are the two main highlights of the policy. Most of what was announced today was hinted in last year’s policy," according to Mr Rathi.
The deferred cut in interest rates would have some impact on government security prices which are likely to see a fall over the next couple of days, he added.
Essar Group director Prashant Ruia also shares the opinion that certain concern areas of the corporates have been addressed to in the policy. A 50 basis points cut in CRR releasing about Rs 5,000 crore to the system would influence a moderate fall in the short-term real interest rates.
The central bank continues to maintain an accommodative monetary policy bias, as borne by the CRR cut. The directive asking banks to review spreads over PLR would offer relief to those corporates who are already hurt by the business cycle lows, Mr Ruia felt.
Wockhardt Ltd vice-chairman and executive director HL Mundra said that the credit policy is more decisive than expected and it synchronises with what the budget said.
The half per cent cut in CRR would effectively bring down the interest cost and keep the rates softer. RBI has made an attempt to pass on the benefit of low interest regime to those who are not fortunate enough to have a good rating, he added.
Larsen & Toubro chief financial officer YM Deosthalee feels that the RBI should have provided some direction in the policy.
"Everyone was thinking in terms of a time path for bringing down the CRR to the 3-per cent levels," he said.
The RBI is comfortable on yields on government paper as is evident from the policy. "The policy is along expected lines—a very cautious approach," sums up Mr Deosthalee.
Indian Merchants’ Chamber (IMC) president Arvind Jolly has extended a cautious welcome to provisions of the credit policy.
He said that the cut in CRR and interest rates would mainly help boost government borrowings and also benefit prime borrowers. However, RBI’s projection of GDP growth rate between 6 per cent and 6.5 per cent was somewhat ambitious, he added.
According to Jindal Vijayanagar Steel director (finance), Seshagire Rao, continuation of low interest rate regime with the reduction in CRR and bank rate will facilitate flow of credit at lower interest cost.