NEWS & ADVICE : CAR LOANS
Interest rates for OBC not rising soon
By Vaibhav Aggarwal
Nov 22, 2010
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Public sector lender, Oriental Bank of Commerce has said that the immediate future does not see any spurt in interest rates although it did not deny the fact that liquidity conditions prevailing in the economy are tight.

"I do not see the interest rate increasing now," Oriental Bank of Commerce (OBC) chairman and managing director T. Y. Prabhu said.

"There is less liquidity in the system and RBI also is looking at the issue of inflation. It wants to bring down the inflation. Therefore, RBI has kept liquidity in a negative mode," Prabhu said.

On the other hand, lenders of the likes of ICICI and Punjab National Bank expect a rise in interest rates soon seeing the tight liquid condition.

"There have been some aberrations in the system due to the recent high success of public issues, which have sucked in lot of liquidity," he said.

"This is a busy season... now demand and credit will pick up and our GDP growth is also very good... So, I believe, that to fulfill the demand of a growing economy the RBI will ensure adequate liquidity," added he.

He said, " Normally demand picks up in the second half of the year, which is considered to be a busy season. Agricultural credit is also expected to grow with rising requirement for rabi crop. I expect good credit growth from both the agriculture and services segments."

"We have not revised our outlook. For the first half we had 16 per cent credit growth. In deposits, we expect growth of 23-24%," Prabhu said.


 


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