The Hindu Business Line : Rate cuts soon, say banks based in Mangalore

Mangalore, Dec. 6 Bankers in Mangalore view the growth stimulus measure, which was announced by the Reserve Bank of India (RBI) on Saturday, as a positive thing for the entire economy. Mr J.M. Garg, Chairman and Managing Director of Corporation Bank, told Business Line here that the growth stimulus measure will help banks to lend more. Asked about the rate cut by the bank, he said: “We will have our meeting soon and take a decision shortly as to what needs to be done. We will have to act quickly as signalled by the RBI. We will do that. I am sure that all other banks will do that.” Reduction in repo and reverse repo rates will put pressure on the banks to reduce the interest rate. So both lending and deposit rates will come down. This will, in turn, help the industry as well as investment climate in the country. It is a positive factor for the economy, he said.

On the measure announced to the real estate sector, Mr Garg said this measure has been again a relief to the real estate sector, which was reeling under slowdown and high cost of funds etc. Other measures announced today will help boost the growth of micro and small enterprises and housing sectors, he added.

‘Expected move’

Mr Ananthakrishna

Terming the stimulus measures an expected move, Mr Ananthakrishna, Chairman and Chief Executive Officer of Karnataka Bank Ltd, said that this will help in credit expansion. Opining that there could be rate cuts in banking system, he said Karnataka Bank will take a decision on rate cut after its meeting next week. The RBI move will help facilitate liquidity in the system, and call rates will also come down, he added.

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