JOIN USScheduled commercial banks, which are already burdened by high cost of borrowing owing to non-availability of easy money, are in no mood to raise their interest rates consequent to the Reserve Bank of India (RBI) maintaining status quo in its first quarter review of monetary policy that left key rates unchanged.
Bankers told the media here that they don't any need to raise interest rates as of now. In this context, State Bank of India Chairman Pratip Chaudhuri said: "Loan demand is weak. Steps (RBI liquidity measures) are temporary. We are watching and will wait for next two-three weeks so as to see how long those continue. We do not rely on mutual funds for day to day fund requirement. We have huge deposit base."
RBI had earlier taken a series of liquidity tightening measures, which were aimed at making money costlier and that in turn would create demand for rupee, a favourable factor to check the exchange rate volatility. However, RBI on Tuesday hinted at rolling back those measures gradually as stability restored to the forex market enabling monetary policy to revert to supporting growth with continuing vigil on inflation.
ICICI Bank MD & CEO Chanda Kochhar said short term borrowing rates have come down.