Govt borrowings not to raise lending rates: PNB
State-owned Punjab National Bank said the government's plan to borrow over Rs 4 lakh crore to fund its fiscal deficit is not going to push the lending rates northward as there is enough liquidity available in the market.business Updated: Jul 16, 2009 16:57 IST
State-owned Punjab National Bank on Thursday said the government's plan to borrow over Rs 4 lakh crore to fund its fiscal deficit is not going to push the lending rates northward as there is enough liquidity available in the market.
"I do not see any reason that the interest rates are going to increase because of the Centre's borrowing plans as there is enough liquidity in the market for lending," PNB Executive Director Nagesh Pydah told reporters in Chand on the sidelines of the State Level Bankers Committee meet.
"The borrowings have been planned in such a way that it will not have any impact on the liquidity side," he said.
Interestingly, the latest statement by PNB comes within days of the country's top lender the State Bank of India saying that the rates might see an increase in the next couple of months.
In the Budget 2009-10, Finance Minister Pranab Mukherjee had pegged government borrowings at a whopping Rs 3.98 lakh crore in 2009-10 to fund its rising fiscal deficit.