<p>Interest rates, both for deposit and lending, are likely to remain static as the Reserve Bank today kept the key rate unchanged at its fifth bi-monthly monetary policy review.<br /><br /></p>.<p>"Interest rates are likely to remain unchanged," SBI Chairperson Arundhati Bhattacharya told PTI.<br /><br />Echoing similar views Yes Bank CEO and Managing Director Rana Kapoor said: "Base rate and benchmark prime lending rate are unlikely to see any downward revision at the moment. It can happen only after policy rate moderates."<br /><br />However, he said, there could be some adjustment in interest rate of deposits of long tenure over 3 years.<br /><br />Some of the banks have done this and some more could do it based on their asset liability position, Kapoor said, adding that a few more banks can make changes in the coming days as system has ample liquidity.<br /><br />According to United Bank of India Executive Director Deepak Narang, margins of banks are already under pressure due to high NPA level. "So, I don't see a cut in the interest rate at the moment," he said.<br /><br />RBI Governor Raghuram Rajan today kept interest rate unchanged, saying that a shift in stance is 'premature' but hinted that a cut may come early next year if inflation continues to ease and government acts on the fiscal side.<br /><br />Accordingly, the repo rate continues to be at 8 per cent while the cash reserve ratio has also been retained at 4 per cent despite inflation based on the Wholesale Price Index coming down to a 5-year low of 1.77 per cent in October.<br /><br />The low inflation is not because of structural changes in the domestic economy but due to fall in international prices of crude, which has declined to a historical low, said Shashwat Sharma, Partner - Financial services, KPMG India.<br /><br />"Therefore, we understand and appreciate the RBI's stance on no cut in interest rates and look forward to structural changes by the government in the domestic economy," he added.<br />However, RBI has clearly opened the window for rate cuts to begin in the next review in February 2015 or possibly earlier, Kapoor said.<br /><br />"I see space for monetary accommodation to the tune of close to 100 basis point cut over the course of next 12 months in 2015-16," he added.</p>
<p>Interest rates, both for deposit and lending, are likely to remain static as the Reserve Bank today kept the key rate unchanged at its fifth bi-monthly monetary policy review.<br /><br /></p>.<p>"Interest rates are likely to remain unchanged," SBI Chairperson Arundhati Bhattacharya told PTI.<br /><br />Echoing similar views Yes Bank CEO and Managing Director Rana Kapoor said: "Base rate and benchmark prime lending rate are unlikely to see any downward revision at the moment. It can happen only after policy rate moderates."<br /><br />However, he said, there could be some adjustment in interest rate of deposits of long tenure over 3 years.<br /><br />Some of the banks have done this and some more could do it based on their asset liability position, Kapoor said, adding that a few more banks can make changes in the coming days as system has ample liquidity.<br /><br />According to United Bank of India Executive Director Deepak Narang, margins of banks are already under pressure due to high NPA level. "So, I don't see a cut in the interest rate at the moment," he said.<br /><br />RBI Governor Raghuram Rajan today kept interest rate unchanged, saying that a shift in stance is 'premature' but hinted that a cut may come early next year if inflation continues to ease and government acts on the fiscal side.<br /><br />Accordingly, the repo rate continues to be at 8 per cent while the cash reserve ratio has also been retained at 4 per cent despite inflation based on the Wholesale Price Index coming down to a 5-year low of 1.77 per cent in October.<br /><br />The low inflation is not because of structural changes in the domestic economy but due to fall in international prices of crude, which has declined to a historical low, said Shashwat Sharma, Partner - Financial services, KPMG India.<br /><br />"Therefore, we understand and appreciate the RBI's stance on no cut in interest rates and look forward to structural changes by the government in the domestic economy," he added.<br />However, RBI has clearly opened the window for rate cuts to begin in the next review in February 2015 or possibly earlier, Kapoor said.<br /><br />"I see space for monetary accommodation to the tune of close to 100 basis point cut over the course of next 12 months in 2015-16," he added.</p>