Banks unlikely to raise rates: PNB chief

Font Size

Print

Feedback

Email

Discuss

Related Articles

All India Bank Strike on September 24 and 25Banks unlikely to raise rates: PNB chiefBank strike on two days this week

Mumbai, September 1:: Indian banks are unlikely to raise lending rates for the next 5-6 months even if the central bank raised its key lending rate, a top banker told a television channel on Monday.

Most banks have factored in another policy rate increase this year when they raised interest rates in June and July, K.C. Chakravorthy, chairman and managing director of Punjab National Bank told CNBC-TV18.

The Reserve Bank of India raised its key lending rate three times in June and July to a seven-year high of 9 percent. India's annual inflation stood at 12.40 percent on Aug. 16, above the central bank's target of 7 percent by March-end.

"There may be some hike in the deposit rate, because still I feel that with inflation is 12 percent, we need to compensate savers to encourage their savings in this difficult market," he said. The state-run bank chief said an increase of 50 basis points in the cash reserve ratio or an increase of 25 basis points in the repo rate would not affect the bank's margin by more than 10-15 basis points.