ICICI Bank to decide on interest rate cuts in a few weeks

ICICI Bank On Thursday said it will take a call on cutting interest rates in a few weeks. “ICICI will look into interest rate reduction in a few weeks. Interest rates are coming down, (they) should come down to single digit,” ICICI Bank Chief Executive Officer and Managing Director K V Kamath told reporters on the sidelines of a CII function.

He said every bank has to look at its cost of funds. “Banks should start considering 0.50 per cent cut in interest rate ... Possibly in a week or few weeks,” Kamath said. He added that deposit rates have come down, but rates on bond prices are still high.

"Clearly, inflation is nearing zero, but we are not able to bring down lending rate to single digit. So there is a need to look at more policy action," Kamath said.

“Things are moving in that (interest rate cut) direction, but there are some barriers left. Deposit rates have gone down, there has been easing from (the) central bank but the bump is that (rates for) 10 years’ treasury bonds should have been less than 5 per cent, but (have) spiked (to) more than 6 per cent,” he said, adding that it is a temporary block.

Regarding credit growth, he said it has not slowed down and things are becoming positive again.

“We will have full normalcy by September ... Corporate India is going to be competitive again,” he added.