Bankers don't see interest rate spike in next 6 months
Leading bankers do not foresee any rise in the interest rates at least for the next six months and want the Reserve Bank of India (RBI) to keep the monetary stance unchanged in its policy review due later in the month. - Bankers meet with telcos, UID to spread banking - ICICI, Citi among 17 in race to manage NMDC issue - Hindustan Copper to appoint merchant bankers on FPO - 13 Orissa districts financially included - NMDC may get issue advisors, investment bankers soon - Banks fail to expand in Haryana While State Bank of India Chairman O P Bhatt expects the interest rate to remain stable till June-end, Corporation Bank Chief J M Garg wants the RBI to keep the key policy ratios and rates unchanged. The RBI is slated to announce its third and last quarterly review of the monetary policy of this fiscal on January 29, during which it will endeavour to draw a balance between the conflicting objectives of pushing economic growth and curbing the spiralling inflation. Despite the rising inflationary pressures, there will be no increase in the interest rate on loans in the next six months because of surplus liquidity in the market and rising deposits, Bhatt told PTI. There is ample liquidity in the market and credit offtake is slowly picking up, the SBI chief added. The ballooning food inflation and advancing wholesale price-based inflation may soon force the RBI, which unfolded its first phase of monetary stimulus exit by restoring the SLR (statutory liquidity ratio, which is the percentage of deposits banks have to park in government bonds) to the mandatory 25 per cent level from the previous 24 per cent, in the October policy review. "I don"t think there will be any hike in interest rates in the next three months, as there is enough liquidity in the system," Garg told PTI. Even if the apex bank tightens money supply in its January policy review or even before, it will not result in a spike in the key interest rates because there is ample liquidity, Garg said. With surplus liquidity in the system, a hike in the cash reserve ratio, which is the percentage of amount banks should park with the RBI, will help mop up the excess money from the system, the Corporation Bank chief pointed out. Asked about his wish-list, Garg said, "I would wish the RBI retain all the key policy rates during this fiscal." With a substantial recovery from the economic slowdown expected in 2010, bankers also expect a healthy pick up in bank credit growth. "As we move ahead, when we shun the impact of the slowdown, I expect bank credit growth to revive considerably, which may result in an upward movement of lending rates as well," said Bank of Baroda Chairman and Managing Director M D Mallya. Oriental Bank of Commerce Chairman and Managing Director T Y Prabhu echoed the view saying the industry is poised for a healthy revival in the next year and corporate demand is likely to go up in the next quarter. "We can see corporates coming back with their project proposals as the economic activities picking up. The pick-up is already happening. This would only go better in the months ahead and I am quite optimistic about the new year," Prabhu said.Instant cash commented:
Gud that the interest rate have not been increasing as that will create problem for the people
29.08.2011
Payday Loans commented:
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29.09.2011
cash loans commented:
In the past several years, banks have given a very low interest rate to their customers. Many are below 0.50%, but some are as high as 1.00%. Chase Savings is currently at 0.01%, which is almost the same as having 0% interest.
10.10.2011
payday lenders commented:
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01.11.2011
Multi Family Offices commented:
It only shows how optimistic they are about the economic situation and RBI should keep its effectiveness, and come up with very helpful policies so that the growing interest charges could go down.
03.12.2011