ICICI Bank Chief For Interest Rate Correction

K V Kamath, ICICI Bank Ltd Chief, said that the interest rate needs to be corrected to improve credit off-take despite liquidity in the system. On the increase in cash reserve ratio (CRR) by 50 basis points, Kamath said banks were yet to assess the impact of the Reserve Bank of India''s (RBI) decision on their business.

I am not hearing any banker talk of increase in interest rate despite a 0.5 per cent hike in CRR to 7.5 per cent. The banks are yet to find balance to take a call on the rate, Kamath pointed out. Referring to the RBI''s decision to maintain status quo in interest and deposit rates, Kamath said bankers would start adjusting deposit rates downwards, which in turn would signal a correction in lending rates too.