Mumbai, Feb 7 (PTI) Reserve Bank Governor Sanjay Malhotra on Friday made it clear that the "less restrictive" monetary policy approach, which helped deliver a 0.25 per cent rate cut is only for this meeting given the current circumstances.

After delivering a rate cut -- the first such move by the RBI in five years -- Malhotra made it clear that the RBI's target is get the inflation number at 4 per cent on a durable basis in the medium term and it will not be content in keeping it in the 2-6 per cent range.

"This less restrictive policy is only for this particular MPC meeting and not going forward," Malhotra told reporters after chairing his first MPC meeting.

"We will try to align the inflation with the target that has been given to us, at the same time supporting growth," he said.

To a specific question on whether the RBI would want to get the inflation at 4 per cent or be happy if it stays in the 2-6 per cent band, Malhotra used an analogy of exam to make it clear that RBI would want to excel.

"The passing marks are 40 (in the exam). What do you aspire for? Do you aspire to pass, or, do you aspire to do extremely well? Some may like to just pass, in RBI, we like to be on top of everything," he said.

The RBI decided to cut rates and support growth at today's meeting because of the declaiming inflation and projections of it cooling down further, he said.

The career bureaucrat-turned-central banker added that the stance continues to be neutral, which allows the flexibility on either side to the Reserve Bank depending on the incoming data.

The real rate is about 1.5 per cent at present, Malhotra said, without spelling out the level at which the RBI would want it to be.

To a question on rupee, Malhotra suggested that we should not be looking at the day-to-day volatilities in the currency, but should rather look at its range over a longer term.

He also admitted that the depreciation in rupee certainly puts pressure on the inflation, explaining that a 5 per cent depreciation leads to over 0.30 per cent impact on price rise through imported inflation.

The bigger worry for the central bank is not the movements in rupee, but the global uncertainties that are playing out which include the trade wars and geopolitical tensions, Malhotra said.

The governor said these uncertainties have a direct impact on growth, investment decisions and also consumption, and hence need to be monitored better.

To a question on transmission of today's rate cuts into the system, Deputy Governor Swaminathan J said it will take up to two quarters for the moves to reflect in the lending and deposit rates in the system, and added that the external benchmark-linked loans will get repriced immediately.

Deputy Governor M Rajeshwar Rao also said the RBI has undertaken a comprehensive review of the guidelines on the misspelling of financial products by banks.

"We should be trying to come out with some guidelines shortly on this area also on the conduct of banks in various areas," he said. PTI AA TRB

Less restrictive monetary policy used as a temporary tool to support growth while targeting durable inflation alignment. Reserve Bank adopted a less restrictive monetary policy for this meeting, implementing a rate reduction while maintaining a neutral stance to retain flexibility based on incoming data; the move targets durable alignment of inflation with the 4 per cent aspiration amid cooling inflation projections. The Governor noted exchange rate pass through to inflation but identified global uncertainties as the principal macroeconomic risk. Deputy Governors explained that transmission to retail rates will take quarters though external benchmark linked loans will reprice immediately, and that the Bank is reviewing guidelines on bank conduct related to misselling of financial products.