As RBI has signalled an end of soft interest rate regime, the State Bank of India is considering to withdraw its special home and car loan schemes, carrying an interest rate of 8% for the first year of repayment period of loan. SBI's current special scheme will expire on November 7. A senior SBI official said the bank will take a final view within this week. Other PSU banks are also considering to withdraw special schemes, announced to revive the demand for houses and cars in Q1 of 2009, when the country was facing one of the worst economic slowdown in the last five years. To counter slowdown, RBI had also announced a number of measures to infuse liquidity, leading to fall in interest rates. The measures helped in putting the economy back on revival path. Since inflationary pressure is also mounting, RBI governor D Subbarao, while unveiling review of monetary policy, said central bank's main focus will be on checking inflation and for this monetary policy could be tightened. But this gave a signal to bankers that interest rates are likely to go up, prompting them to consider to withdraw offering loans at lower rates under special schemes. The apprehension is RBI may increase CRR — the proportion of deposits that banks need to keep with central bank —by half a percentage points to 5.5%, sooner or later, to mop up excess liquidity from system.
No comments:
Post a Comment