Mumbai, Oct 9 (PTI) The Reserve Bank's move to hold rates was on the expected lines, but the softening of the stance can be seen as an affirmative front-loaded policy move, bankers said on Wednesday.

"The RBI policy statement is a clear recognition of robust growth and an inflation trajectory that is trending down. The shift in stance to neutral is an affirmative front-loaded policy move that will ensure the RBI remains nimble footed to align inflation with the 4 per cent target," SBI Chairman CS Setty said.

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Among the foreign lenders, Zarin Daruwala of Standard Chartered Bank said the status quo decision is backed by strong economic projections for FY25, and the shift to a neutral stance comes from the RBI's confidence in reigning inflation within the target range.

"The MPC's change of stance to 'neutral' is encouraging. We can expect rate cuts in the upcoming announcements," South Indian Bank's Chief Financial Officer Vinod Francis said.

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Kotak Mahindra Bank's head for commercial banking Manish Kothari said the oft-repeated statement on "unambiguous focus" on inflation signals clearly that any future rate cut would depend upon the inflation trajectory trending downwards.

Earlier in the day, the RBI's rate-setting panel decided to hold the rates by a majority and unanimously chose to shift the stance of the policy to 'neutral' from the earlier 'withdrawal of accommodation'.

Industry lobby grouping IBA's current chairman and state-owned Central Bank of India's managing director MV Rao said the policy was along the expected lines.

Even though the stance has been softened, he said the RBI will still be cautious about keeping inflation under its targeted range.

He added that retaining both the inflation and growth estimates for FY25 is a positive for the market because it shows the confidence of the central bank in the growth and inflation dynamics.

Setty welcomed the enhancement of limits under UPI (Unified Payments Interface) as a testimony to the continuous innovation in India's digital infrastructure and also the creation of the RBI climate risk information system, which will standardise data sets related to climate and bring them to one platform.

Francis said geopolitical volatility is a worry as it threatens to impact fuel prices, which could subsequently stoke inflation and exude confidence in the RBI's ability to manage.

Among the non-banks, Shriram Finance's executive vice chairman Umesh Revankar said the shift in stance is encouraging and raises hopes of a possible rate cut in the near future and also hoped that inflation will reduce in the coming months.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)