After RBI's surprise, banks to lower lending rates soon, say top bankers

Welcoming RBI's decision to cut rates, top lenders SBI and ICICI Bank today said the much-awaited lowering of lending and deposit rates would 'definitely' take place now.

hidden January 15, 2015 12:47:51 IST
After RBI's surprise, banks to lower lending rates soon, say top bankers

Welcoming RBI's decision to cut rates, top lenders SBI and ICICI Bank today said the much-awaited lowering of lending and deposit rates would "definitely" take place now.

After RBIs surprise banks to lower lending rates soon say top bankers

SBI chairperson Arundhati Bhattacharya. PTI

While refraining from giving any specific timeline for such rate cuts by the banks, they said the way forward was certainly going to be a review of the rate cycles.

"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.

Earlier in the day, RBI decided to cut policy rate by 0.25 percent to 7.75 percent.

Reacting to the rate cut, 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".

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 added.

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

Bank of Maharashtra Chairman S Munhot also said many banks would now look at easing interest rates.

PTI

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Centre lifts embargo on grant of government business to private banks, says Nirmala Sitharaman
Business

Centre lifts embargo on grant of government business to private banks, says Nirmala Sitharaman

Private banks can now be equal partners in the development of the Indian economy, the Union finance minister added

RBI concerned over impact of cryptocurrencies on India's financial stability, says Shaktikanta Das
Business

RBI concerned over impact of cryptocurrencies on India's financial stability, says Shaktikanta Das

The RBI governor said: 'We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide'

Finance ministry allows all private sector banks to participate in government-related businesses
Business

Finance ministry allows all private sector banks to participate in government-related businesses

This step is expected to further enhance customer convenience, spur competition and raise efficiency in customer services, a ministry statement said