Banks Rule Out Any Immediate Cut In Lending Rates Due To High Cost Of Funds
Mumbai: Borrowers troubled by elevated interest rates will have to wait for a bit longer for relief as bankers have virtually ruled out any immediate cut in the lending rates, citing high cost of funds.
The stance comes even after the Reserve Bank of India (RBI) delivered two successive rate cuts of a cumulative 0.50 per cent.
“The basic thing that is required the cost of deposits is still in the higher side,” state-run Union Bank of India chairman and managing director D Sarkar said, explaining his bank’s inability to cut rates now.
Pratip Choudhary, the chairman of the nation’s largest bank State Bank of India (SBI), also said it is impossible for his bank to cut rates in the near term.
Many state-run banks that generally rely on the costly bulk deposits to shore up their deposit bases unlike their private sector counterpart, which mop up the low-cost savings and current account deposits, have been ratcheting up their term deposit rates over the past few months.
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