Rates unchanged, but RBI sees scope for banks to cut further
July 29th, 2009
RBI Governor Duvvuri Subbarao sees scope for banks to reduce lending rates. Despite repeated calls for banks to reduce lending rates, banks have not been following RBI’s diktat as “banks were worried that non-performing assets will rise from unsecured loans,” he explained.
According to the RBI Governor, banks are worried that the liability structure is getting shorter and their share of current account-savings account ratio is declining.
Public sector banks, he said, have emphasised need for capital going ahead. Bankers indicated pick-up of credit demand in October-March, he added.