Comments of Mr. Shyam Srinivasan, Managing Director, Federal Bank on the First Bi-Monthly Policy of FY 15-16

RBI’s stance of no cut in policy rates is along expected lines. RBI in the recent past has cut interest rates on two occasions on dates other than the policy review dates, implying that it reacts dynamically to data flow. I believe that on similar lines, as data comes through over the next few weeks, the  likelihood of policy rate cuts exist.

This monetary policy, the regulator has come up with measures that would benefit the retail investor and the corporate sector. Steps to improve the ease of trading in G-secs by a retail investor, without an intermediary and through a demat account, will go a long way in deepening the market. There is something for corporates to cheer as well, as they will be able to raise ECB by issuance of rupee bonds overseas.

One noteworthy point in the policy announcement was pertaining to strengthening the Boards of the Banks and thereby increase the standards of corporate governance, inter-alia, being able to attract talented professionals into Director positions.