The country’s largest private sector lender, ICICI Bank, does not see immediate pressure on interest rates, but expects them to rise from the second quarter of next fiscal due to increase in demand for credit.
“Clearly, we will see no immediate pressure on interest rates. But we will see upward pressure on interest rates – not from the beginning of next fiscal, but I would say second quarter of next fiscal,” ICICI Bank CEO and MD Chanda Kochhar told reporters on the sidelines of the Diamond Jubilee celebrations of PTI here.
She said interest rates are not driven so much by policy announcements of the RBI, but demand and supply of credit and level of liquidity. “Interest rates are driven not just by policy announcements, but more by demand and supply of credit and liquidity, currently since there is enough liquidity, my view is there would not be any immediate pressure on interest rates,” she added.
The RBI has recently asked banks to keep more cash with it to suck out Rs 36,000 crore from the system to combat inflationary expectations.
From next financial year, there will be big demand for credit as many projects are seeing financial closure.
She, however, said rise in interest rates would be gradual and not something that will hurt growth.
