ICICI Bank, the largest private lender of the country announces that the interest rates are expected to come down in the next one-and-a-half months.
K. V. Kamath, the CEO and MD of ICICI Bank opined, "I think in next six weeks, interest rates are expected to come down. I think interest rates would be adjusted on their own."
Recently, many banks have reduced one-year deposit rates by 2 per cent. HDFC Bank has also slashed interest rates on personal and commercial vehicles by up to 150 basis points.
The bank will also cut down the interest rates on corporate loans and wholesale credit. This move will benefit small and medium enterprises as well as the large companies.
Kamath, hinting at possible rate cuts said that the banks are also looking at passing it on to the customers. He added, "With the lowering of borrowing cost the banks will start lending at lower cost."
The Reserve Bank may signal softer interest rates in the recent times when inflation declining sharply and demand is slowing down. This may not fiddle much with key rates in the quarterly review of its annual monetary policy to be released on January 27.
Central Bank has already brought down CRR and short-term rates to inject Rs 3, 00, 00-crore liquidity into the system. Due to this, the bankers feel that the RBI may maintain a status quo in their key rates.
Till October, 2008, the Apex Bank had been hiking its signalling rates. Presently the bank has begun to slash its cash reserve ratio, repo and reverse repo rates, to support growth.
A sincere cut down of rates is observed in the rating process. The RBI has reduced its CRR to 5 per cent, repo to 5.5 per cent and reverse repo to 4 per cent.
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