HDFC Bank cuts base rate by 10 bps ahead of RBI meet
“For us, this is the second cut from the peak and consistent with the movement in deposit rates and the cuts in the cash reserve ratio,” observed Paresh Sukthankar, executive director, HDFC Bank. Sukthankar added it was difficult to say whether the trend, of interest rates coming off, would gain momentum given that the banking system was seeing some shortage in liquidity and that the growth in deposits had slowed. “We will need to keep a watch on the liquidity piece,” he said.
The RBI had left both the policy rate and the CRR unchanged at 8% and 4.25%, respectively, at its last review meeting on December 18. “The emerging patterns reinforce the likelihood of steady moderation in inflation going into 2013-14, though inflation may edge higher over the next two months,” the central bank had observed.
On September 18, State Bank of India (SBI) had cut its base rate by 25 basis points to 9.75%. That apart, SBI had trimmed rates on select products such as home and auto loans ahead of the festive season, in an attempt to attract customers. However, loan growth
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