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(Transportation-News.com, March 26, 2013 ) Hickory Hills, IL -- The lending rate is unlikely to be lowered within March as many bankers said that they are will simply wait for further signals from the RBI before they attempt to lower rates for home and auto loans.
The RBI slashed short-term lending rates by 0.25% to what now stands at 7.5%. Bankers read the cut as not enough for any immediate cut to their own lending rates. Accordingly, the short-term borrowing rate would then also come down to 6.5%; However, the Cash Reserve Ratio has thus been retained at 4% on the expectation that there will be more spending in the future.
"Banks would cut the lending rate when deposit rates, both short-term and long-term, start showing a decline. Base rate may not be cut at this point of time," Indian Overseas Bank Chairman and Managing Director M Narendra said.
Status quo is set to be maintained up until the end of March and likely thereafter the banks will assess the liquidity of general conditions when it comes to future rate cuts, says Narendra.
According to MV Tanksale, the Director of the Central Bank of India Chairman of Managing, the use of a reduction is one that is expected, and it shows the that RBI is supportive of the country's overall growth.
"This certainly will reduce the cost of borrowing for the banks but I cannot say how it is going to shape up in the reduction of the base rate. We will discuss this issue with,” he said.
Tanksale continued by noting, “our ALCO (Asset Liability Committee) as we have upwardly revised our deposit rates recently.”
There appears to be no disappointment regarding the CRR cut as the liquidity deficit in another system is not much, while credit growth is not highly significant, according to Tanksale.
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Source: EmailWire.Com 
Source: EmailWire.com
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