What does India Inc expect from tomorrow's credit policy?

Industry bigwigs such as Rahul Bajaj and Adit Godrej hope for a rate cut. Though Bajaj believes a rate cut tomorrow is highly unlikely. Godrej on the other hand is also hoping for some action on the CRR and SLR front.

All eyes are on the first Reserve Bank credit policy due tomorrow. Industry bigwigs such as Rahul Bajaj and Adi Godrej hope for a repo rate cut. Though Bajaj believes a rate cut tomorrow is highly unlikely. Godrej on the other hand is also hoping for some action on the CRR and SLR front.

Economists and bankers too are divided on their opinion.

Rahul Bajaj: I also am in favour of low rates of interest but I don't think that is likely tomorrow. I don't think that is likely, I would welcome it even by 25 basis points if he reduces and everybody will be jumping through the roof if he reduces by 50 basis points but that is highly unlikely. 25 also unlikely but he might adjust the CRR.

Adi Godrej: I hope there is a rate cut, 25 basis points would be appropriate because the inflation has come down quite a lot and it will help growth and I hope there is an statutory liquidity ratio (SLR) and cash reserve ratio (CRR) cut also.

Arundhati Bhattacharya, Chairman, State Bank of India : I think you will see some rate action going forward. Of course everybody is going to wait for the monetary policy I suppose because that does give some indicators about the thinking of the regulators as to how they see the trajectory of various economic indicators.

The slack season is here, we need to get credit growth to pickup. Given those realities I think some kind of rate action will follow.

Samiran Chakraborty, MD and head – South Asia Macro Research, Standard Chartered Bank: Timing of the rate cut call is becoming increasingly difficult with two consecutive inter-meeting rate cuts. We still expect another 25-50 basis points of rate cuts to happen if our overall inflation trajectory view on that remains correct. We are looking for 5.4 percent average inflation for fiscal year 2016 and about 150 basis points of real policy rate should give RBI scope for a little bit more rate cuts.

Sonal Verma, Chief Economist-India, Nomura: Our base case is for no more cut. I think the language used in the March surprise inter-meeting statement was that RBI has pre-empted the rate cut given weakness in the economy. So, our sense is that RBI has frontloaded the interest rate cuts in order to give more time to banks to respond going forward. I guess the focus in this policy should be much more on transmission rather than RBI action per se. So, unchanged at the April policy is our expectation.