Reserve Bank of India will look into loan and deposit growth of banks for framing the November monetary policy, deputy governor Usha Thorat said Tuesday. ?Banks have given their assessment…all this will be taken into consideration while formulating policy,? Throat said at a seminar on financial inclusion. Bank deposits grew at 14.8% on year in the fortnight ended Sep 10, while loans grew at 19.8%. The central bank targets a loan growth of 20% in 2010-11 (Apr-Mar).
Speaking to senior executives of State Level Banking Committee, Thorat said objectives of banks are to provide financial services to people so as to enable them to meet their entrepreneurial challenges and aspirations. ?Banks can lend at sustainable rates and still be very much reasonable,? she said, adding, this would indirectly contribute to the economy and India?s target for an overall inclusive growth.
Banks? failure to expand into rural areas was giving scope to microfinance institutions to lend at ?money-lenders? rates, she said. Throat also said government?s recently launched Unique Identification number project gives a huge opportunity for banks that can act as enrolment agencies. ?In the next two years, enrolment of millions and millions of people to give UID is going to happen. Requirement for doing that enrolment is identical to requirement of opening a bank account. Banks, other than riding on this enrolment process, should try to become an enrolment agency and be the first registrar (for UID),? she said.
India Inc?s borrowing costs to rise 10 bps: Fund managers
Mumbai: Companies? borrowing costs through bonds are expected to turn expensive by 10-15 basis points after banks hiked minimum lending rates, the so-called base rates, by 25-50 bps amid tight liquidity, fund managers and company officials said on Tuesday.
?I do see the borrowing cost going up from the current level by about 10 bps due hike in base rate by banks amid tight liquidity,? said Shameek Ray, senior vice president at ICICI Securities Primary Dealer. Banks have been hiking base rates in the range of 25-50 bps after they hiked their respective deposit rates to tide over tight liquidity conditions.
Indian Bank, Kotak Mahindra Bank and Axis Bank raised Base Rates by 25 bps, while IDBI Bank, Allahabad Bank, Punjab National Bank, Karur Vysya Bank hiked it by 50 bps. Meanwhile, State Bank of India and State Bank of Travancore have kept their Base Rate unchanged. ?Base rates have gone up because the deposit rates have gone up, which was due to tight liquidity,? Ray said.
Banks, across the board, also hiked deposit rates after liquidity in the system continued to remain tight amid central banks calibrated rate hike against high inflation.
