It’s no longer a question of whether bank interest rates will harden or not.The debate now is around the timing of that hike. Top bankers in the country are still reviewing the repo rate hike.
Bankers feel that a PLR hike might not be necessary immediately but they are assessing the situation and can’t rule it out. If RBI makes another move in July, it’s a certainty that the EMI’s will go up.
“Liquidity situation is comfortable right now. We are assessing the situation and will take a call,” said K V Kamath, MD & CEO – ICICI Bank.
The country’s largest bank SBI will announce its decision within 24 hours but certainly not at the cost of upsetting its PLR customers. SBI might try to structure the hike in a way that PLR linked products are not impacted. But the unanimous consensus is a hardening interest rate regime over the next year.
“I’ve maintained that it’s a flat to up as far as interest rates are concerned. I mean they are certainly not going down,” added Naina Lal Kidwai, CEO & MD – HSBC India.
It’s obvious that the hardening rates means more doom for consumer loans. But what does it mean for corporate loans, will investment slow down?
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