In an interview with CNBC-TV18, Umesh Revankar of Shriram Transport Finance said that a rate cut in RBI's policy meeting on Tuesday would have benefited the SMEs who need cheap loans.
Umesh Revankar, managing director of Shriram Transport Finance told CNBC-TV18 that a 25 basis point-cut in Tuesday’s RBI monetary policy meeting would have been beneficial for small and medium sized enterprises (SMEs).
Despite this, Revankar expects the RBI to cut rates going forward if inflation remains stable.
Revankar said that Shriram Transport has had an advantage of nearly 20 bps reduction in loans with previous rate cuts by RBI this year.
He said urban and rural demand are both growing this quarter. Despite warnings of inadequate monsoon, Ravankar expects higher harvest, especially in irrigated regions, before the festive season.
Below is the transcript of Umesh Revankar's interview with Ekta Batra and Nigel D'Souza on CNBC-TV18.
Ekta: What was your take on the credit policy as a whole and do you expect further rate cuts from the Reserve Bank of India (RBI) in the remaining part of the fiscal?
A: We did expect a rate cut of 25 bps. Maybe, RBI is still looking for inflation trigger point because monsoon story is not fully over. So that could be playing in RBI's mind.
Otherwise, I feel 25 bps cut would have been much better because right now many of the industries especially SME industry is looking for lower rates to revive their fortunes. That could have definitely better.
Nigel: We haven’t got that rate cut now so for the reminder of this year, how many rate cuts are you factoring in and do you see it coming in the next meet itself?
A: I think during this financial year, we do expect around 50-75 bps rate cut if the inflation remains under control and that will do a lot of good for the economy and the manufacturing activity.