The Hindu Business Line : Bankers discuss slow credit offtake with RBI

Mumbai, Oct. 4 The slowdown in credit growth and the impact of the recent global events on India were the points of discussion at the bankers’ meeting with the RBI Governor on Thursday, according to Mr O.P. Bhatt, Chairman, State Bank of India, who spoke to reporters later.

Mr Bhatt said that the credit growth this year had been muted compared to the previous year. “The interest rates have hardened and there is pressure on bringing lending rates down,” he said. He felt that the deposit rates were also not easing. Margins were under pressure.

Talking about the trends expected for the rest of the year, he said that there would be no immediate change from the situation, as matters still remain complicated.

On being asked what his bank would do should the cash reserve ratio be hiked, Mr Bhatt said: “The bank would take a combination of measures – it would absorb whatever it can and pass on the rest to its customers.” He said they did not press the RBI for an interest rate cut at their meeting.

Lending rate cut

He said that the bank would take a decision on lending rate cuts at its next Asset Liability Committee meeting.

The bankers’ meet was led by Dr A.K. Khandelwal, Deputy Chairman, Indian Banks’ Association, and CMD, Bank of Baroda.

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