The Hindu Business Line : No immediate spike seen in interest rates

Kolkata, June 12 The 25 basis points hike in repo rate announced by the Reserve Bank of India on Wednesday evoked mixed reactions among senior bank officials at Kolkata-based banks.

Mr T.M. Bhasin, Executive Director, United Bank of India, said there was not enough scope for lending rates to inch up at present. “It is a lean period and credit offtake is not very high. There is also comfortable liquidity in the system, hence we might not see the interest rates moving up at present,” he said.

Mr Bhasin, however, said the bank would look at realigning interest rates on some advances. Mr V.K. Dhingra, Executive Director, UCO Bank, felt the interest rates on advances could move up. “The liquidity is fast drying up and the call money is also tight which could lead to a hike in interest rates,” he said. He however said the bank would take a view on rates at the ALCO meeting.

On the deposits front, he said that the interest rates on bulk deposits could see a slight increase.

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