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| Banks indicate rate cuts | | | AGENCIES
NEW DELHI, Nov 4: Several banks are expected to cut their lending rates beginning tomorrow following Union Finance Minister P Chidambaram's call for such a reduction in order to stimulate economic growth.
Apart from SBI, Bank of Baroda (BoB) and Bank of India (BoI) are also expected to decide on their rates this week.
A top BoB official said the bank was actively looking at a rate revision but would take a call only after due deliberation.
A few banks have already cut their lending rates. These include Punjab National Bank, IDBI Bank and Union Bank of India. Kolkata-based Uco Bank has announced its decision to cut its prime lending rate by 50 basis points by next week.
With inflation declining and the Reserve Bank cutting its repo rate by 150 basis points in the last one month, the focus has shifted from inflation control to growth stimulus.
Growth has shown signs of slipping and hence the Finance Minister's call to banks to enhance the credit flow in the system.
While bankers are tight-lipped about the extent of cuts, banking industry observers expect them in the range of 50-75 basis points.
HDFC's Chairman Deepak Parekh said the lender would wait and watch for some time prior to taking a call on a possible lending rate cut.
"We need to wait and watch (for) some time (before taking a call on interest rates). The deposit rates have to come down first before cutting lending rates," Parekh told reporters here on the sidelines of a function. |
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