Money & Banking

SB account rate deregulation to push up banks' interest cost: Vijaya Bank CMD

Anjana Chandramouly Bangalore | Updated on March 12, 2018 Published on October 25, 2011

Mr H.S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, told Business Line that the rate hike today was on expected lines, which the market has already factored in.

"It is too premature to say that whether we will transmit to customers and if at all, when as the RBI has asked banks to come out new product schemes on the savings bank front. Savings deregulation will result in some increase in interest cost to banks. So it is a different situation from the last RBI rate hike, and in my opinion, transmission might be required not unless interest cost on savings bank is compensated by pricing of transactions in the savings bank services like remittances etc."

Credit growth is already slowing down in the banking industry, and new sanctions also have substantially declined, he said. "However, many banks have announced festival offers which will ensure that the interest rate is low over the next two-three months. Because of festival rates, no slowdown is expected in the immediate future."

Published on October 25, 2011
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