HDFC sees RBI rate hike in March quarter

HDFC sees RBI rate hike in March quarter

Mumbai: The Reserve Bank of India (RBI) is likely to hike interest rates marginally in the fourth quarter of this fiscal to rein in the steady rise in prices, a top financial sector expert said.

“To give a signal that the government is concerned about inflationary pressures, there is a chance of a marginal hike in interest rates in the January-March 2010 quarter," HDFC chairman Deepak Parekh told reporters here.

The hike in interest rates could be by at least 0.5%, he said, adding, however, that any hike in rates was unlikely to happen in the current quarter.

On liquidity Parekh said, at present it was sufficient.

With a revival in the economy and pick-up in construction activities, banks could witness a growth in their wholesale loans going forward, he said.

However, any pick-up in loans to the commercial real estate sector is unlikely, he said.

“I don’t see commercial real estate loans picking-up ... there are a large number of commercial real estate properties that are ready to be occupied," he said.

Banks have seen an increase in their housing loans portfolio in recent months, Parekh said.

Parekh observed that housing prices have started inching up in the recent months.

HDFC has seen a sequential growth of 30% in its loan approvals in the July-September quarter of this fiscal and expects growth to pick-up further in the coming months, he said.

Companies, he said, have to be cautious while pricing their Initial Public Offers (IPO) as failure of large IPOs could dent investors’ confidence.

“We must learn to leave money on the table. Investors are there to make money. If large IPOs fail, then there is a huge repercussion in the market," he said.