The Reserve Bank of India (RBI) on Friday indicated that it believes interest rates should be stable so that there are no liquidity issues and the interest of common man is not adversely affected.
The comment from Reserve Bank of India Deputy Governor KC Chakrabarty gains importance as it comes ahead of the quarterly review of the annual monetary policy, slated for July 28. “RBI is not interested in making things difficult, it is in favour of stable and benign interest rates,” Chakrabarty said.
Speaking at a Skoch BFSI seminar on inclusive growth, he said: “In the face of high competition in industry, banks, particularly those in the private sector, will have to lower lending rates.”
According to Chakrabarty, inflationary situations and individual conditions would determine which bank would cut rate and which would not.
“Pressure on interest rates would also depend on the world economy. There are signs of global debt market reviving,” added Chakrabarty.