Rate cuts to happen soon, predicts ICICI Bank chief

November 18th, 2008 - 4:04 pm ICT by IANS  

New Delhi, Nov 18 (IANS) ICICI Bank, India’s largest private sector bank, believes interest rates would come down further.”The interest rate is a subject of demand and supply, it will take a little time but a rate cut is there in the offing,” ICICI Bank managing director and chief executive officer K.V. Kamath told reporters Tuesday at the World Economic Forum’s India Economic Summit here.

With regards to inflation coming down to the single digit mark, Kamath said it would dip even further. “If I take inflation at face value, it will come down to 5 percent even quicker than we thought it would.”

India’s annual rate of inflation moderated to 8.98 percent for the week ended Nov 1. The first time it breached the double digit mark was in June reflecting a 13-year high.

Kamath also said monetary measures could be taken despite the recent cuts in the credit reserve ratio (CRR) and statutory liquidity reserve ratio (SLR). “There is still scope of 2.5 percent to play around with in the CRR,” he said.

One of India’s leading banking professionals, Kamath identified infrastructure as one sector that was poised for growth. “There are enough funds to complete ongoing projects and more opportunities would arise on completion of these,” he said.

On banks being wary of lending for consumer durables, Kamath said this was on account of low recovery from “unsecured category of borrowers”.

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