Lending rates to fall, deposit rates to hold, say bankers
With others slated to follow, lending rates are set to head downwards as bankers appear near unanimous in their resolve to pass on the benefits of rate cut by the RBI to their borrowers. Deposit with banks may, however, continue to fetch similar returns as there has been a deceleration in the growth of aggregate deposits and banks may continue to offer higher rates to push it up.
“The indication from all bankers is that there will some transmission on the lending rates and on deposit rates we are going to watch the situation,” said Chanda Kochhar, MD and CEO, ICICI Bank.
IDBI Bank has, however, reduced retail term deposit rates only for select buckets. NHB has reduced its prime lending rate from 10 per cent to 7.5 per cent with immediate effect, it said in a statement.
D Subbarao, Governor, RBI said that the banks have assured the regulator that the loan rates would be brought down through a cut in the base rate and bankers maintained that their Asset Liability Management Committee (ALCO) will meet soon to take a call on lending and deposit rates.
“Banks have an urgency to
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