BANKING
| Don't hike key rates beyond 25 bps, bankers plea to RBI Tue, 05 Apr 2011 15:11:36 GMT |
| MUMBAI: Bankers today requested the Reserve Bank not to hike key rates "beyond 25 basis points" in its quest to tame inflation in the forthcoming monetary policy announcement on the ground that anything higher can have an adverse effect. "We told them that an increase of 25 basis points in repo and reverse repo would be okay. Anything higher can have a negative impact, especially on the credit growth front," Indian Banks Association's Chief Executive, K Ramakrishnan, told media. Top bankers, including Bank of Baroda's CMD M D Mallya who is also the IBA Chairman, Canara Bank CMD S Raman and Union Bank's chief M V Nair, among others, met RBI officials here in the customary pre-policy meet before the annual policy announcement on May 3. Interest rates would be stable with banks not expected to tinker with their rates till the policy, Bank of Baroda's Mallya, told reporters after the bankers meeting with RBI officials. "Liquidity is reasonably good and therefore I don't expect any (interest) hikes (by banks) immediately," he said. In its efforts to tame the runaway inflation number, the Reserve Bank had hiked its key rates - the repo at which it lends to the banks and the reverse repo at which it absorbs extra cash from banks - a record eight times in the last year. Inflation, which stood at 8.31 per cent in February 2011, is still above the comfort mark and in the last mid-quarter policy, the RBI had said its policy stance would be directed towards bringing the number down. |
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