No increase in interest rates: Kamath
By Joseph Samson
May 30, 2008
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Reacting to certain reports saying that other banks might follow State Bank of India’s lead by increasing their interest rates, ICICI Bank managing director & CEO, KV Kamath, indicated there is no pressure on banks to raise interest rates, given the prevailing comfortable inter-bank liquidity. This follows a move by State Bank of India (SBI) announcing its plans to raise interest rates for medium- and longer-term deposits.

"The systemic liquidity is comfortable now in the banking system. There is no systemic demand as well," Mr Kamath said here on Tuesday at a press meet organised by Confederation of Indian Industry (CII). He said that the absence of credit off-take meant no immediate pressure on liquidity in the system.

Being the first CII president, Mr Kamath said the country was likely to grow at around 8.61% during the current financial year. However, he believed that low agricultural productivity would remain a challenge. In his leadership, the CII is preparing a long-term vision for the country.

According to Mr Kamath, India is poised to grow steadily in the next 20 years. "India’s growth story will continue for a long period of time. The strong savings rate (34.8%), investment rate (35.9%) and consumption rate (67%) will propel the growth."

However, he stated that all this would come with a cost of its own. He said in spite of good growth, the economy would face many challenges— weak agricultural productivity, rising commodity and consumer prices, pressure on balance of payment and core sector bottlenecks being some of them. On the very hot and debated topic of inflation rates, the banking honcho said, "Inflation is not significantly different from other advanced countries. Commodity prices have peaked in 2008."

Referring to his future plans, The CII president mentioned that Africa would soon emerge as an important business destination. CII, whose journey began in Kolkata, is looking to tap the opportunities by setting up four offices across the continent.

(Comments Posted : 3) Post Your Comments
1. Today ICICI is offering cheap housing loans to new borrowers, while the old borrowers are at loss. I took loan of 18lacs in 2004 @ 7% floating rate of interest and today it is 12%. However, if i have to take new loan, ICICI is ready to offer even 10.5%. When 7% was the least interest rate available to me in 2004 the same priority treatment should prevail to the same borrower in todays date also. why existing customers being treated as step customers and made to dish out more money? Why law makers not intervening & seeking explanation from ICICI ?
G S Malik (Posted: May 31, 2008)
2. Mr kamnath do rightly said that "Inflation is not significantly different from other advanced countries. Commodity prices have peaked in 2008."
He ends up giving the macro economic view that everythings fine. Wake up Mr kamnath the average citizen is struggling to fight the price rise. Though we are advancing but the inequitable distribution of income is maximum in our country. Inflation does play a significant part .
ankit (Posted: May 30, 2008)
3. please provide email addresses of rupeetimes as well as the experts.

i.k (Posted: May 30, 2008)
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