ICICI Bank, the country?s largest private sector bank, sees no need to tinker with interest rates, its chief executive officer & managing director, KV Kamath, said here on Tuesday. Kamath?s statement comes a day after State Bank of India, India?s largest bank, raised some deposit rates.
Kamath, who was in Kolkata as president of the Confederation of Indian Industry, said: ?There is no need to tinker with the interest rate now. Systemic liquidity is good while systemic demand is slack. We will have to watch carefully for either raising (the) interest rate or lowering that.?
The State Bank group, which commands almost 23% of India?s banking business, had on Monday increased the interest rate on two- to three-year term deposits from 8.5% to 8.75%, and on five- to ten-year deposits from 8.5% to 9%.
Kamath told reporters: ?I think industry should look at what is happening to systemic liquidity before people touch base.? He said consumer prices are a challenge, but high inflation can be seen around the world.
?There is a large pipeline of investment and I do not see that slowing down and that investment is going apace,? Kamath said. He said the savings rate has gone to a level where it can drive growth.
?Four years back, the savings rate was 24% (and) we were worried whether the savings rate will allow for a 10% growth. But clearly, with the savings rate at 35% and investment rate at 36%, I think we are able to invest what needs to be invested to grow at a rate of 10%,? Kamath said.
According to Kamath, the last 20 years were China?s in terms of growth momentum, and the next 10-20 years will be India?s. ?Thereafter it will be the turn of the Africa. Now it is for us to engage with Africa today.? CII is opening four offices in Africa and one in Beijing next year. It will set up seven offices within India.
