Terror to impact capital flows in short term: Kamath

Terror attacks in Mumbai will impact capital flows in the short term, ICICI Bank Managing Director & CEO K V Kamath said here.

"FDI inflows will be affected for a short period, but things will be back to normal soon," Kamath said on the sidelines of a bankers' meet with Reserve Bank of India (RBI) Governor D Subbarao here today.

"Terror attacks on Mumbai city were a sad event. I think the city has got enormous resilience and I am sure it will show in terms of picking up and going about its own business," he said.

When asked about the meeting with Subbarao, he said there was nothing much.

 

"We exchanged notes on the business climate. We also discussed issues relating to problems faced by SMEs and liquidity," Kamath said.

"We had interaction with the RBI governor about the status of financing SMEs and the export sector and the problems faced by them," Bank of India Chairman and Managing Director T S Narayanasami said.

The regulator wanted to have a feel on the bankers' perspective on current liquidity conditions. According to the RBI, short-term liquidity is very comfortable and there is no issue on this, he said.

Narayanasami said: "Our cost of deposits has come down and we are very much in favour of reducing lending rates. But we have to wait for a while."

Commenting on the impact of the terror attacks on capital flow, Narayanasami said, "Today the Sensex has done well, which means India's economy is very resilient."