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

Stories to read over the weekend

At one time these pale rooms of the Delhi commission for women looked like sleepy corners of officialdom; they are now best described as a bustling sarkari office. The woman who transformed this moribund organisation hardly looks like a powerful leader. Dressed in casual blue jeans and loose deni

Tata Trusts, PFA to build state-of-the-art veterinary hospital

Tata Trusts and People For Animals (PFA) announced their collaboration to build a state-of-the-art, multi-specialty veterinary hospital and emergency clinic at Navi Mumbai to serve the needs of all domestic and farm animals at affordable rates.   The hospital will be built in Kala

The shot just got smarter

A long queue of women, infants in their arms, extends outside the immunisation room at the community health centre (CHC) in Bhangel village, Noida, a pink double-storey building beside a bustling market. Unmindful of the chit-chatting and baby babble, Mariamma Samuel, an auxiliary nurse-cum-midwi

Do you think fugitive industrialist Vijay Mallya will be extradited from Britain to India?

Do you think fugitive industrialist Vijay Mallya will be extradited from Britain to India?

Reform first, privatise later: Bibek Debroy to railways

Before privatisation and corporatisation, the Indian Railways need to undertake major reforms including commercial accounting, decentralisation and human resource among others, said Bibek Debroy, economist and member, NITI Aayog at Railways Reforms and Governance Conclave organised by Governance Now on Fri

NTPC plans for 32 GW installed capacity via renewable sources

NTPC Ltd has raised Rs 2,000 crore through green masala bonds in overseas market under its $4 billion medium term note programme, union minister Piyush Goyal informed the Lok Sabha. The proceeds of these bonds will be used for financing renewable energy projects in accordance with applicable

Video

हमेशा रहें चुनाव के लिए तैयार - मोदी ने कहा सांसदों से

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter