Mumbai: HDFC Bank, India’s No. 2 private sector lender, expects most players in the banking sector to fix the base rate between 6.75 and 8%, a senior official said on Tuesday.
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Paresh Sukthankar, executive director of HDFC Bank also said the bank does not see any major impact of the new rate on profitabilty.
The bank expects credit growth in 2010-11 to grow “little faster” than the sector’s 20% growth, Sukthankar told reporters. Improving business and consumer confidence is bringing back credit demand from companies and mortgage borrowers in Asia’s third-largest economy, boosting the earnings of lenders such as HDFC Bank and its bigger rival ICICI Bank.
Bank credit in India grew an annual 19.1% in early June, according to Reserve Bank of India’s data, in tune with a rise in business and consumer confidence, from a low of 9.7% in October and 16.7% at end-March.