The Hindu Business Line : Rate cut: Banks have to ‘wait and watch’

Kolkata, Nov. 1 The Reserve Bank of India’s ‘triple dose’ approach (cut in CRR, SLR and repo rates) certainly signals a rate cut. However, banks would have to wait and watch the market before taking a call on interest rates, according to senior bank officials.

While some bankers feel there could be a 100 basis points cut in lending rates, some others prefer to take cue from the market.

According to Mr S.K. Goel, Chairman and Managing Director, UCO Bank, interest rates will start moving southwards. “We will look at a one per cent cut on lending rates. Deposit rates will also come down thereby bringing down the cost of funds,” Mr Goel said.

Meet on Nov. 10

Bank’s margins, which were under pressure, might ease to some extent, he pointed out. The Asset Liability Committee of the bank will meet on November 10 to take a call on interest rates, he said.

Mr K.R. Kamath, Chairman and Managing Director, Allahabad Bank, said, “We should wait and see how the market responds to the news of rate cuts. Earlier also there was a 100 basis points cut in repo rates but there was not much change in the structure of market and rates.”

According to Mr T.M. Bhasin, officiating Chairman, United Bank of India, “RBI’s measure of cutting CRR, SLR and repo rates will bring stabilization in the market condition apart from injecting sufficient liquidity into the system. Interest rates will now come down and this will boost credit offtake.”

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