RBI opens door to season of rate cuts

Banks likely to reduce lending and deposit interest rates; United Bank announces new rate from Feb 1

GN Bureau | January 15, 2015



A season of easing of rates has been signaled by the Reserve Bank of India with 25 basis point cut repo rate on Thursday.

Top lenders led by SBI and ICICI spoke of lowering of lending and deposit rates by the banks. SBI Chairperson Arundhati Bhattacharya said it was very difficult to talk about the timing of reduction in interest rate by her bank as of now, but "We can expect cutting lending rates in the coming days".


Welcoming the RBI decision, Bhattacharya said, "We believe that this cut may be just the beginning of a rate easing cycle."

"Definitely, I think those cuts will happen that we have been talking for a while for easing of the rate cycle," ICICI Bank CEO Chanda Kochhar said when asked whether the lending and deposit rates would come down now.


Kochhar said that the decision by banks to lower the rates would be taken by their Asset-Liability Committees after looking into their own cost of funds, but that the direction was clearly towards reduction in the interest rates.
"In the deposit rates, we had already started factoring from as early as October as all indicators were forward looking indicators and were indicating that inflationary expectations were coming down sharply.


"I think that has probably played out the way we had envisaged that it would, and the way forward would be reviewing of rate cycle," she said.

However, the banks refrained from giving any specific timeline for such rate cuts but the United Bank of India has already begun the season of rate cuts by reducing its base rate by 0.25% to 10%. The lending rate cut is effective from February 1.

 

Comments

 

Other News

The dirt in the diamond trade

The dazzling diamond trade has been hit hard by the Nirav Modi episode, which saw the billionaire jeweller flee India just before a massive fraud amounting to Rs 11,000 crore was detected at a Punjab National Bank branch in Mumbai. But, Nirav Modi is not the only diamond tycoon who has been

PM lays foundation stone for Navi Mumbai International Airport

PM Narendra Modi on Sunday laid the foundation stone for Rs 16,700 crore Navi Mumbai International Airport. The first phase of the construction is expected to be completed by December 2019. The project is going to be implemented 21 years after it was first proposed. The airport is likely to handle 10 milli

Health groups irked by the SC order on vaccine PSUs

Health groups have expressed their disappointment with a February 12 order of the supreme court, refusing to review or recall an earlier order disposing off a case against the mala fide suspension of the vaccine public sector units (PSUs) and government’s tendency to pamper private sector with public

Cut government stake below 50% in banks: Assocham

The Punjab National Bank`s fraudulent transactions worth Rs 11,300 crore should act as a strong trigger for the government for reducing its stake to less than 50 percent in the banks which should then be allowed to work on the lines of private sector lenders with a full sense of accountability to their sha

Tightrope walking meets poll dance

Budget 2018, forecast to be a “please all” budget, has come out as a “disappoint all” budget. The public is looking askance at a budget that gives with one hand but takes away with both, the Sensex has gone into a tailspin and the pink papers are issuing dire warnings.

Should public sector banks be privatised?

Should public sector banks be privatised?

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter