Inflation will not be a big problem and therefore, don’t expect any action from the Reserve Bank of India (RBI), said Sanjeev Prasad, managing director and co-head of Kotak Institutional Equities, on Tuesday.

The wholesale price-based inflation (WPI) rose up to 10.49 percent in April, as against 7.39 percent in March. This is the fourth straight month of uptick seen in the wholesale price index (WPI)-based inflation.

Speaking in an interview with CNBC-TV18, Prasad said, “We are looking at Consumer Price Index (CPI) inflation below 5.5 percent for most of this calendar year. Therefore, with this backdrop even if inflation goes up with what we are projecting currently, I do not think it will be that much of a problem. We do not think RBI would be responding as long as it’s manageable below 5.5 percent.”

On banks, Prasad, “It looks like a one-quarter impact as far as collections or disbursements are concerned. I do not think it will have that big an impact as far as a household is concerned. Most of the banks are still looking reasonably valued. Of course, need to careful in terms of which banks to look at because of the impact of COVID on different on lenders.”

For the entire interview, watch the video

(Edited by : Abhishek Jha)