The Reserve Bank of India (RBI) has reversed its loose monetary policy in no uncertain terms.

The 75 basis points hike in CRR will most likely push up lending rates very soon. This was a harsher than expected policy. The CRR has been upped from 5% to 5.75%. What this means in lay terms is that banks can't lend 5.75% of their deposits, but have to keep it in cash. In an interview with CNBC-TV18, Alok Mishra, CMD, Bank of India; RC Bhargava, Chairman, Maruti; Jahangir Aziz, Economist, JP Morgan, and Srinivasan Varadarajan, ED, Axis Bank gave their perspective on how the RBI's move will play out in the days to come. Here is a verbatim transcript of the interview. Also watch the accompanying video. Q: What do you think will be the impact on lending rates? By April, by May, by June when do you think rates will already start moving up or will it be even earlier? Varadarajan: I think this 75 bps CRR hike is slightly more than what the markets and banks had expected. The reactions from both banks and markets has been a lot more dovish than what I had expected because I think the beauty of the monetary policy is the Liquidity Adjustment facility (LAF) corridor. By doing this 75 basis points CRR hike, RBI has given itself the flexibility of doing rate hike by stealth at some point of time when they feel it is appropriate. So the 3.25% reverse repo rate is one rate but again as liquidity tightens you could at some point see 4.75% also. Even though the Deputy Governor sort of ruled it out till March 31, but if the situation warrants that can happen. If you take that into account and if you assume that if the global situation also continues in the same way as it is right now, yesterday's US GDP growth was higher than anticipated, you are looking at further liquidity absorption and rate hikes possibly in April. I would think by June PLR should nudge higher but lending rates to corporates will already start going up as we go closer to April, as liquidity tightens. Q: Srinivasan of Axis Bank believes that even before this financial year is out maybe some sub-PLR loans at least will start getting priced higher even if the Prime Lending Rate (PLR) doesn't change. What do you think is the experience at your bank? Mishra: I quite agree that the sub-PLR loans might be - about 72-73% are sub-PLR lending. So this might be priced close to PLR. But I do not see any interest rate hike by the banks because there is enough liquidity in the market even after this 75 bps hike in the CRR. But maybe around Q2 of 2010-11 there could be because at that point of time we will have to see. But right now in the short-term I do not see any rate hike.