This India bank doesn’t expect a rate cut anytime soon

Kotak: RBI policy seen unchanged for a while

Inflation in India remains sticky and that's reason enough not to expect interest rates to fall anytime soon, says the executive vice chairman and managing director at private lender Kotak Mahindra Bank.

The Reserve Bank of India (RBI) on Tuesday left its benchmark interest rate unchanged at 8 percent in a widely anticipated move.

It has hiked rates three times by a total of 75 basis points to contain price pressures since last September, when Governor Raghuram Rajan took over the helm.

Read MoreIndia leaves key rate unchanged at 8%

"The issue is that consumer price inflation is still high at about 8 percent and within this, core inflation is still sticky," Kotak Mahindra Bank's Uday Kotak told CNBC, replying to a question about whether he expected a rate cut.

India's consumer price inflation eased to 8.10 percent in February from a year earlier, near the 8 percent target the RBI has for January 2015. Core inflation, which excludes food, remains high at about 8 percent.

Dhiraj Singh | Bloomberg | Getty Images

Wholesale price inflation meanwhile eased to 4.68 percent on year in February, a nine-month low, while the rupee has stabilized after being battered to record lows against the dollar last year. That has fueled talk that the RBI is now in a better position to deliver a rate cut to boost a sluggish economy.

Read MoreA rise in prices by any other name: CPI vs WPI in India

"If inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture," RBI Governor Raghuram Rajan said in his policy statement following Tuesday's rate decision.

Speaking to CNBC before the RBI's announcement, Kotak said he expected monetary policy to remain unchanged for some time.

"Some of the respite we have seen in inflation in recent times is coming out of a drop in food price inflation, but unless we see a drop in core inflation I do not see the central bank changing its monetary policy," said Kotak, who is India's richest banker according to Forbes.

"For the central bank to start reducing rates it needs to see headline inflation at or below 8 percent and trending down. This is an issue that I don't think is easily resolvable," Kotak added.

He said it was too early to say whether inflation was trending up or down.