KV Kamath, managing director and CEO, ICICI Bank, has said that Reserve Bank of India (RBI) may take further monetary measures in a bid to control interest rate movements in the country.
?My experience is that it takes around 7-15 days after the announcement of monetary measures to fully understand whether the system is truly surplus or short of liquidity,? he said.
He said that ICICI Bank will adopt cautious approach before taking a final call on altering the interest rates. ?Steps taken so far clearly indicate that interest rate drop would certainly happen,? he added.
Kamath was speaking at Knowledge Management Summit 2008 organised by Confedeartion Indian Industry (CII) on Wednesday.
?Reducing interest rates is probably something that we as a nation should do now to maintain economic momentum and as we see inflationary pressures abating. We might see interest rates going down as they do not drop in isolation. As funding costs go down, the banks in the country would be in a position to pass-on the advantage to the borrowers. This adjustment process may take some time before we witness a decline in the interest rates,? he said.
Kamath said that corporate sector’s growth is under huge pressure in India at present.
?The 25% growth witnessed by corporate sector on quarter-on-quarter basis during the last 18 quarters has eventually come down to 9-6%. The sector is not going to witness a steep-dive although loss of confidence prevails in the corporate sector at present. This year we might grow at 7-8% however for the next fiscal, the growth rate could retard.?