Borrowers may be in line for further interest-rate relief, as ICICI Bank, India’s second-largest bank, has hinted of further lowering of interest rates.
Speaking at CII’s National Conference, KV Kamath, chairman of ICICI Bank, said: “Inflation has dropped to zero per cent, the commodity prices have dropped to one-third. Banks could bring down the lending rate to single digits for consumers who are viewed as good risk.”
“However there are barriers (to business) such as the 10-year bond rate, which is out of sync. Although deposit rates are decreasing, the 10-year bond continues to be at the same level,” he added.
Kamath said it is not correct to say that banks are not lending. “In fact, lending by banks are at record levels. Banks have (only) cut down on certain types of lending — e.g. unsecured lending,” he explained. “Barring a few sectors such as real estate, corporate India is on a recovery path,” he felt. “Recovery is visible,” said Kamath, who is also the CII president.