The Hindu Business Line : Rates may not drop this fiscal, says Kamath

Mumbai, Feb. 5 Interest rates are not likely to see a downward movement in this fiscal and banks need to watch the demand-supply situation, said Mr K. V. Kamath, Chief Executive Officer, ICICI Bank.

Speaking at a CII seminar here today, Mr Kamath said, “This is the quarter when rates normally rise. So it is unwise to comment for the next six weeks.”

About a slowdown in credit offtake, Mr Kamath said that the only two sectors where there were signs of a slowdown were mortgages, auto and light engineering. “One reason for the slowdown in mortgages is the high property prices. Property prices have increased dramatically in the last two years,” he said.

When asked if the Reserve Bank of India is likely to take a cue from the rate cut by the US Federal Reserve and cut domestic rates, Mr Kamath said the challenges faced by India are different from those faced by the US. “The monetary policy has to keep in mind external and international situations,” he said.

In his address, Mr Kamath said that India can touch a double digit growth, provided it meets challenges like connecting rural people and developing people with the right skill sets. The pipeline for investment in India is $ 750 billion over the three years, he added.

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