Bankers remained ambivalent on the impact of Tuesday’s policy announcement by the Reserve Bank on the cost of funds and refrained from giving a guidance on the direction in which lending rates are headed.

“I think there are a lot of moving parts here, so I think one should wait for some time and then see what exactly are the effects on the cost of funds and then only take a call,” Chanda Kochhar, MD & CEO of the country’s largest private sector lender ICICI Bank, told reporters here.

Elaborating on the difficulties, she said Governor Raghuram Rajan has put in measures like enhancement in the longer tenor repo borrowing limits and reducing the marginal standing facility (MSF) rate (which decrease the cost of funds), but also increased the repo rate.

There are other factors like seasonal liquidity constraints due to a pick up in credit demand, she said.

“Yes, some rate changes will be expected,” said Arundhati Bhattacharya, who took over as chairperson of the country’s largest lender State Bank of India, but she also declined to give a direction in which the changes will pan out.

She said that asset liability committee of every independent bank will look into the matter.

HDFC Bank’s head Aditya Puri said: “Cost of funds over the last three months have gone up. We are going back to a normalised monetary policy and over a period of time, it would come down.”

Punjab National Bank CMD K R Kamath, who also heads the industry body Indian Banks Association, pointed towards the policy comment on making deposits attractive by increasing the rates of interest.

“It is also a feeling that the returns we are giving to the depositors are negative if you factor average inflation impact. Unless you make your deposits attractive, the money may not come to the banking system...banks should work on getting deposits,” he said.

Mr Kamath, however, added that this should not be seen as any hint of upping the deposit rates.

Mr Puri said if the deposit rates were to go up, the lending rates will also follow suit.

In his maiden full policy announcement, Mr Rajan increased the repo rate by 0.25 per cent, but cut the marginal standing facility, which is the penal rate for exceeding their overnight borrowing limits, by an equal measure. He also doubled the bank’s borrowing limit under longer tenor repo.

The announcement, especially the second consecutive action on the repo front in as many months, led to fears of a spike in the already high lending rates.

It can be noted that the country’s quarterly growth slipped to a four year low of 4.4 per cent in the April-June period. The high interest rates is blamed as one of the detrimental factors affecting rates.

More In: Industry | Business