Lending, deposit rates not to fall: Bankers

Saturday, October 25, 2008 at 5:10 am

Bankers today (October 24) said that they did not expect lending and deposit rates to decline in the immediate-term following the Reserve Bank leaving its key rates and Cash Reserve Ratio (CRR) untouched today.

“I don’t expect lending and deposit rates to come down for sometime now. Everybody will wait and watch to see how the financial markets settle down,” Abhijit Sen, CFO, Citibank India, told news agencies.

With a slew of measures already taken earlier in the month to infuse liquidity into the system, the Reserve Bank leaving its rates untouched was not very surprising, Sen said.

The policy stance is aimed at ensuring stability in the financial markets, HDFC Bank’s Deputy Treasurer, Ashish Parthasarathy, said.

“There were some expectations of a further easing of monetary policy and in that sense, perhaps, the RBI leaving its key rates untouched is a bit of a surprise. But overall, the stance is clear–the RBI wants a stable financial system,” Parthasarathy said.

The RBI’s 2.5 per cent cut in CRR and the one per cent repo rate cut announced earlier in the month have injected stability into the banking system, Yes Bank’s Managing Director & CEO, Rana Kapoor, said.

While the key rates have been left unchanged for now, Kapoor expected a further cut in CRR and repo rate, going forward.

“More relaxations are warranted going forward, given that this is the busy season,” he said.

Kapoor too expected lending and deposit rates to remain unchanged in the near-term.

The Reserve Bank has sent a clear signal that growth cannot be compromised, Citibank’s Sen said.

The 7.5-8 per cent economic growth target is more realistic given the way the overall financial situation has evolved in the last few weeks, Kapoor said.

PTI

( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

Lending, deposit rates not to fall: Bankers

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