ICICI to wait for policy signal on interest rates
April 5th, 2008 | by admin |Mumbai, April 4: Ahead of the Reserve Bank’s annual monetary policy later this month, the country’s largest private sector lender ICICI Bank today said it would wait for policy signals before effecting any change in interest rates.
“We have a very comfortable liquidity situation in the country. Given that it is right to wait for any policy signal before any movement in the interest rate is effected,” ICICI Bank CEO and MD KV Kamath said on the sidelines of conference organised here by CII.
The Reserve Bank is scheduled to announce annual monetary policy on April 29.
Meanwhile, another top bank official said the interest rates were unlikely to rise and would stay in the present range while the liquidity situation was comfortable.
“Interest rates did not spiral in the month of March and we raised deposits at the same rates as in January and February…they (interest rates) would stay somewhere at where they are now,” ICICI Bank’s Joint Managing Director Chanda Kochhar said on the sidelines of the conference.
She expected the bank’s credit growth to be around 20 per cent this fiscal. Its composition would be equally from both corporates and the retail segment, Kochhar said.
In the backdrop of galloping inflation rate, Kamath sounded optimistic on economic growth. “Yes, we have inflation, and policy measures will be taken to control it…but we will see growth happen. Growth is embedded in the way we have set out our (economic) reforms process,” he said.
On interest rates Kamath said the bank would review market conditions before taking any measure to change them. “We will see the market conditions before taking any step,” he said, adding the bank had not reduced interest rate “when other banks were cutting rates”.
The liquidity supply in the country is very comfortable, he said, adding that last year at this time banks were paying up to 12.5 per cent interest rate on one-year deposits as against 9.8 to 9.9 per cent this year.
When asked whether ICICI Bank had suffered any losses on account of exotic derivatives transactions, Kamath refused to comment on the issue.
On inflation, he said RBI and the Government are expected to take monetary and fiscal measures to ease supply side constraints to tame the prices.
Inflation touched the 7 per cent mark for the week ended March 22 as against 6.68 per cent for the previous week. Kamath further said the GDP growth may slip to around 8 per cent this fiscal.
Asked…
