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Chennai, Feb. 21

Will credit offtake pick up now that banks have cut rates a second time? Mr Ananda Bhoumik, Senior Director, Fitch Ratings India, thinks corporate loan growth would remain strong because of the investment cycle that is currently under way. Consumer credit may be more difficult to predict as it is driven by expectations, he says. He points out, “For example, purchases may be deferred if interest rates are expected to fall further (rates increased by more 200 basis poi nts during the last 2 years) or if property prices are expected to correct. The immediate impact of these cuts on banks would be a fall in net interest margins”.

— Our Bureau

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