Bankers have indicated that lending rates in the system might have peaked, providing a big relief to customers who have seen sharp rises in their instalments in last 18 months.

The chiefs of leading public sector banks and housing finance companies, which have not hiked their rates since September though the Reserve Bank of India (RBI) increased its key policy rates twice in last four months, have said with inflation not going up further, they expect lending rates to be stable going forward.

Also, the RBI has already assured that it would not hike its key policy rates in its forthcoming m id-quarter review of m onetary policy for 2011-12.

?I don?t expect the lending rates to go up. I would expect the RBI to address the issue of liquidity as the industry has seen liquidity pressure,?? said Pratip Chaudhuri, chairman, State Bank of India (SBI), the largest commercial bank in the country.

SBI has pegged its base rate at 10%, which is the lowest among banks.

Chaudhuri said food inflation is likely to fall further as the supply side is improving after the Kharif harvest.

Keki Mistry, vice-chairman and CEO , HDFC, said that the largest housing finance company didn?t have any plans hike rates as the cost of funds remained stable.

?I think lending rates have peaked. I see stable rates if RBI doesn?t hike its policy rates further,?? he said.

KR Kamath, CMD, Punjab National Bank (PNB) agreed that interest rates might have stabilised. ?There are indications that the inflation wouldn?t go up further and that would help the RBI to keep its key rates stable. We haven?t hiked rates on last two occasions when RBI hiked its policy rates,?? said Kamath.

However, Kamath didn?t expect inflation to fall that fast that it could leadto a cut in the lending rates, he said.

?Fall in lending rates will start after banks reduce their deposit rates. The bank can?t cut deposit rates when the inflation has remained high. We are working on the scheme to pay higher rates on savings accounts ?? said Kamath.

Kamath said corporate credit has fallen for PNB. Alok Misra, CMD, Bank of India, agreed that it may take some time before RBI reduces its key rates, paving the way for banks to cut lending rates.

The RBI, while unveiling its in half-yearly review of its credit policy on October 25, had increased the short-term indicative policy rate (repo rate) by 25 basis points, from 8.25 to 8.5 %, with the hope that a further rate hike may not be warranted as inflation is likely to fall in December.