New Delhi: The country’s largest private lender ICICI Bank on Monday said that interest rates are expected to come down in the next one-and-a-half months.
“I think in next six weeks, interest rates are expected to come down. I think interest rates would be adjusted on their own,” ICICI Bank CEO and MD KV Kamath said on the sidelines of a CII function here.
In the recent days, many banks have reduced one-year deposit rates by 2%. HDFC Bank has also slashed interest rates on personal and commercial vehicles by up to 150 basis points.
The bank will also cut interest rates on corporate loans and wholesale credit, a move that will benefit small and medium enterprises and large companies.
Kamath, hinting at possible rate cuts said that the banks are also looking at passing it on to the customers.
“With the lowering of borrowing cost the banks will start lending at lower cost,” he said.
With inflation declining sharply in the recent weeks and slowing demand, the Reserve Bank may signal softer interest rates even though it may not tinker much with key rates in the quarterly review of its annual monetary policy to be released on 27 January.
Bankers feel that the RBI may maintain a status quo in their key rates as the Central Bank has already brought down CRR and short-term rates to inject Rs3,00,00-crore liquidity into the system.
After hiking its signalling rates till October last year, the apex bank began slashing its cash reserve ratio, repo and reverse repo rates, to support growth.
The RBI has reduced its CRR to 5%, repo to 5.5% and reverse repo to 4%.