Repo rate hike draws mixed responses from bankers

June 12th, 2008 - 10:03 am ICT by IANS  

Mumbai, June 11 (IANS) The apex bank’s decision to hike repo rate by 25 basis points to eight percent drew mixed responses from the countries bankers as some said it was a clear signal to the commercial banks to manage their liquidity their own. Many bankers said banks have to raise the prime lending rates (PLR), but added that they would continue the wait-and-watch policy for now.

Canara bank chief managing director M.B.N. Rao told IANS: “We won’t hike the interest rates on deposits. Infact, the (RBI’s) move will have a positive impact on the banking system. However, banks with negative liquidity will suffer.”

According to Union bank chairman M.B. Nair:” It’s a message to the banks by the central bank to manage their liquidity their own. On the hike of interest in deposit and prime lending rates, we will decide in next two-three days,” he told IANS.

HDFC bank managing director K.K. Mistry said: “We feel that bankers have to increase the lending rates by June”.

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