The Hindu Business Line : Rates have softened a bit: RBI

Interest rates of banks have softened a bit during the quarter ended September 30, 2007. According to the statement on "Macroeconomic and Monetary Developments" put out by the Reserve Bank of India, to serve as a backdrop to its credit policy review coming out tomorrow, both deposit and lending rates of banks have softened a little at the upper end of the ranges for various maturities.

For public sector banks, deposits of the 1 year to 3 year period are at between 8 to 9% compared to the range of 7.25% - 9.75% in June 2007. For deposits of the above 3 year period they are in the range of 8 to 9.50% compared to 7.75% to 9.75% in June.

Similarly lending rates of private banks have softened a bit although there doesn't seem to be much change in the lending rates of public sector and foreign banks. Prime lending rates of private sector banks have softened to about 16.5% at the upper end compared to about 17.25% a quarter ago.

The statement also noted that yields on government securities have been soft during this period. They have been in the range of 7.80% - 8.32% during this period. Similarly call rates are also hovering once again in the corridor between reverse repo and repo rates compared to the below one per cent levels that prevailed few months ago. - Our Bureau

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