Lending rates to fall, deposit rates to hold, say bankers

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Summary* IDBI Bank, National Housing Bank slash lending rates by 0.25%

to what percentage, benefits can be passed onto the customers,” said VK Sharma, director and chief executive, LIC Housing Finance. When asked if the revision will only be for new customers, he said, “We will review the PLR and the benefits will be passed to all.”

The head of another housing finance company said banks will have to first cut the base rate for benefits to be passed on to the existing customers. ENS

Mint street signals

ON MORE RATE CUTS:

If inflation eases further and the current account deficit moderates, then there will be room for monetary easing

NEW BANK LICENCES:

It’s in the final stages. We’ve responded to the government’s suggestions. We are awaiting the government’s response

GDP GROWTH: The decline in the GDP growth rate

became more broad based, with consumption demand also slowing alongside stalling investment and declining exports

THE BIG RISK: The widening of the current account deficit to historically high levels, especially in the context of a large fiscal deficit and slowing growth, exposes the economy to the twin deficit risk

WHAT ECONOMY NEEDS: What the economy needs most of all and most urgently is new investment. This will step up currently flagging aggregate demand and also ease the supply constraints so that existing capacity is fully utilised and new capacity is built up.

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