A pause in interest rates by the Reserve Bank of India’s Monetary Policy Committee (MPC) would help stabilise economic conditions and support growth, State Bank of India (SBI) Chairman CS Setty said on Wednesday. 

Speaking at the Citi India Conference in Mumbai, Setty said a rate pause at this juncture would help stabilise conditions, while noting that inflation dynamics remain an important factor for policymakers.

Broadly, the market expects that there could be a rate pause at this juncture. Inflation dynamics remain important, but I think a pause would definitely help stabilise conditions and ensure smooth growth,” he said.

In addition, the chairman of India’s largest lender urged investors to look beyond short-term movements in equity markets and focus on the nation’s long-term structural transformation driven by reforms in banking, digital infrastructure, financial inclusion and infrastructure development.

He said, “Do not look only at the Sensex… look at India as a long-term story.”

Amid global headwinds, including geopolitical uncertainty, shifting supply chains and changing capital flows, he said India stands out as a source of stability, resilience and opportunity.

Highlighting India’s digital public infrastructure, Setty said, “Today, UPI handles nearly 20 billion transactions a month. SBI handles nearly 30 per cent of that volume. The technical decline rate is as low as 0.01 per cent,” he said.

Moreover, he pointed to the JAM trinity — Jan Dhan accounts, Aadhaar and mobile connectivity — along with direct benefit transfers (DBT) as key drivers of financial inclusion and efficient delivery of welfare benefits.

The RBI’s MPC, which began its three-day policy meeting on Wednesday under Governor Sanjay Malhotra, is scheduled to announce its outcome on Friday.

Many economists have expected the central bank to maintain the status quo on interest rates amid volatile global conditions, driven by ongoing tensions in West Asia.