New Delhi, Aug. 5 -- Lately, market watchers have voiced concern over tepid bank credit growth and its implications for the broader economy. With liquidity flush in the system, many have argued for further rate cuts to stimulate credit offtake.

It seems some commentators are channelling the spirit of the iconic 1990s ad: Yeh dil maange more. Despite the Reserve Bank of India (RBI) frontloading 100 basis points (bps) worth of rate cuts over the past six months and infusing liquidity of nearly Rs.10 trillion, including an impending Rs.2.5 trillion via CRR cuts, calls for more policy easing persist.

With inflation pressures easing (largely due to food), some believe the central bank still has space to act. From a banker's lens, credit dema...