Mumbai: There's a mini credit policy on the cards. With the quarterly review of the monetary policy to be announced on Tuesday, most bankers expect the Reserve Bank of India to take a call on the interest rate only in its April policy.
However, even as the nervous traders wait for RBI's third quarter review of the monetary policy, the expectations are that the RBI will not hike the repo rates.
From the customers' point of view, the RBI doesn't directly impact the rate at which the common consumer-borrow money from the bank. The RBI impacts the rates at which the bank borrows from itself or the banks borrow from RBI. That's called the repo rate, which at present, stands at 6.2 per cent.
Given the fact that there is a lot of cash crunch in the system thanks to a huge loan growth, many of the banks are going to the RBI and borrowing hundreds of thousands of crore of money on a daily basis at 6.25 per cent.
If that rate is hiked to say 6.5 per cent, then the banks will take it as a signal to pass it on to their customers. The expectations of the market are that the bank will not do any such thing as the rates are already moved up in the economy and also because inflation is under control for now.
So, the chances are the bank will not hike its rates as of now. But still if the rates are hiked, then there is a good chance that the banks will raise there floating home loan rates by a whisker.
Comments
0 comment