Mumbai: With inflation spiralling to a three-year high of 7.41 per cent, leading lender IDBI on Friday said it would be not be cutting its Benchmark Prime Lending Rates (BPLR) in the near future.
The bank was earlier mulling a cut in its BPLR which presently stands at 13.75 per cent.
Last month, it had announced its decision to effect a 0.50 per cent downward revision, which it subsequently put on hold.
Citing "prevailing market conditions", IDBI had then said that it would review the situation in about two weeks time.
"After seeing the latest inflation figure (7.41 per cent), we have decided not to reduce our BPLR. A cut in lending rates may not be prudent since the Reserve Bank might hike the Cash Reserve Ratio (CRR) in its credit policy if inflation remains high," IDBI's Chief Financial Officer R K Bansal told PTI here today.
The Reserve Bank is scheduled to announce its monetary policy for FY 09 on April 29.
Bansal said that IDBI might consider a hike in lending rates by 0.50 per cent if the apex bank hiked CRR in its April 29 policy.
"The bank may consider a hike in its lending rates if the RBI increases the reserve ratio. There is no other option before the (banking) industry other than hiking rates in that case," Bansal said.
The bank was earlier mulling a cut in its BPLR which presently stands at 13.75 per cent.
Last month, it had announced its decision to effect a 0.50 per cent downward revision, which it subsequently put on hold.
Citing "prevailing market conditions", IDBI had then said that it would review the situation in about two weeks time.
"After seeing the latest inflation figure (7.41 per cent), we have decided not to reduce our BPLR. A cut in lending rates may not be prudent since the Reserve Bank might hike the Cash Reserve Ratio (CRR) in its credit policy if inflation remains high," IDBI's Chief Financial Officer R K Bansal told PTI here today.
The Reserve Bank is scheduled to announce its monetary policy for FY 09 on April 29.
Bansal said that IDBI might consider a hike in lending rates by 0.50 per cent if the apex bank hiked CRR in its April 29 policy.
"The bank may consider a hike in its lending rates if the RBI increases the reserve ratio. There is no other option before the (banking) industry other than hiking rates in that case," Bansal said.
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